Over-65s waste £87million a YEAR paying off mobile phones they already own

Pensioners are overpaying up to £87 million a year on mobile phone bills, while continuing to put money into handsets they’ve already paid off.

According to research from Virgin Media O2, most retirees have spent more than a year unknowingly paying for handsets they already own.

This costs pensioners on average more than £170 a year, which is more than a week’s state pension for some.

The problem is that consumers often don’t know how two parts of their cell phone bill work: their device payments and the cost of airtime.

Some cell phone companies bundle the two components together when someone signs up for a contract with a new phone included, while others charge them separately.

Neither is a problem until the device is paid off – normally within 12 to 24 months.

What happens next depends on your deal. If you pay for your device and credit separately, you’re free to pay for the credit only, which lowers your bill – or your carrier can automatically switch you to a credit-only rate.

But if your tariff bundles your device and airtime payments, you may be stuck paying for a handset you already own outright.

Older people are particularly at risk from this, with one in five (21 per cent) not knowing when their mobile phone contract will end, Virgin Media O2 said.

More than half (51 percent) also didn’t know they could save by keeping their existing device and switching to a Sim Only deal at the end of their contract.

Gareth Turpin, chief commercial officer at Virgin Media O2, said: ‘Many retirees risk overpaying for phones they already own due to opaque and confusing mobile contracts, while most are unaware they are doing so.

“We are urging anyone who is out of contract and believes they may be overpaying for their phone to contact their carrier, find out the facts and then take action by switching to a split contract or a subscription for airtime only.’

Abigail Wood, CEO of Age UK London charity, added: ‘When we talk about the cost of living, the conversation often turns to heating and food, but confusing utility bills are hugely problematic.

‘Virgin Media O2’s survey results are alarming and show just how much the over-65s are being affected.’

Mobile phone users have seen hefty price hikes of up to 17.3 percent this year, even on airtime-only deals.

One quirk of how many broadband and phone deals have worked since 2021 is that prices can be increased mid-contract.

Earlier this year, Ofcom said consumers do not understand how these price increases work and it may need to crack down on mobile and broadband price increases.

However, Ofcom has no plans to make these deals any cheaper – just to make sure consumers understand how the prices work.

How to save money on your cell phone plan

1) Figure out what you REALLY need

These deals vary in terms of what you get and what you’re charged. If you’re at the end of your plan, or about to take out your first plan, think about what you really need for a mobile phone deal.

If you’ve paid off your handset and would like to keep it, check that you’re not locked into paying a higher rate than necessary.

2) Consider a sim only deal

If you already own a cell phone or can get one cheaply, you may be able to save money with a cheap SIM-only deal.

This is because most cell phone contracts sell you two things: the phone and the usage fee. If you already have the phone, all you have to worry about is the cost of calls, texts, and data.

Users must ensure that they do not exceed the data limits stated when signing up. If this is the case, there may be additional charges – and they can be expensive.

3) Consider a refurbished phone

Instead of buying a brand new phone, see if there’s a refurbished phone that’s right for you. These are phones that have been refurbished by experts to replace broken parts and improve their operation.

They can work out significantly cheaper than new phones. For example, an iPhone 13 costs around £600 to £700 for a new handset, while refurbished models cost around £500.

These savings are even greater for lower-demand phones or older models.

Most Samsung Galaxy phones released in the last five years normally cost no more than £200 when refurbished, for example, but cost up to four times as much new.

4) Be prepared to haggle

If your existing contract ends, haggling with your provider can save you money.

Do your research first and get ready with some of the best deals you’ll find elsewhere. Mention any issues you’ve had with your current provider, as this can give you an edge in any negotiations.

If you’re not happy with the offer your provider is making, say you’re willing to leave. This can miraculously lead to better deals appearing.

5) Be prepared to switch

If you can’t get a deal you’re happy with with your current provider, consider switching.

6) Check if you can get a social rate

There are three social tariffs for mobile phone customers. Sim-only deals can be cheaper, so even if you qualify for a social rate, you should look into that as well.