Martin Lewis has urged every mobile phone user to send a simple text message that could potentially save them hundreds of pounds each month. The personal finance expert made the revelation on his ITV Money Show Live, warning viewers about the pitfalls of continuing to pay for contracts they no longer need.
He highlighted how some people are unknowingly paying exorbitant amounts for deals that included a handset, unaware that their obligation to pay the higher price has ended. To find out if they are ‘out of contract’ and can switch to a cheaper tariff without penalty, Mr Lewis advised people to text 85075.
He said: “Something interesting has happened over the last couple of years. If you’re an existing mobile phone user you had mid contract price hikes often on 18 per cent a couple of years ago, eight per cent last year. Prices have been going up and up.”
“At the same time the cost of new customer sim deals have been plummeting. For 50gb two years ago you’d have been paying £9 .Now you can get it as cheap as about £3 a month.”
He then pointed to a diagram on screen and added: “Look at that dispersal – you’ve got existing customers going up and up and up and new customers going down and down and down.”
Mr Lewis shared his top tips for mobile customers looking to slash their bills, highlighting that with 14 million people out of their mobile phone contracts, the opportunity to switch and save is ripe. He revealed the simplicity of checking contract status by stating: “You text ‘info’ for free to 85075 to check.”
For Three customers, he noted the extra step of providing a date of birth.
Highlighting potential costs, Mr Lewis cautioned that being in contract might involve a termination fee, but otherwise told viewers they’re in the clear: “You’re a free agent – you can go and get the cheapest deals, you can cut your costs.”
He mentioned family deals might not get a straightforward response but suggested as a general guideline that those who haven’t switched in two years are most likely free to move on. Delving deeper into savings, he said: “Next you do a cheap sim comparison. Most of the deals are not available direct from the mobile phone companies because then they might have to give them to existing customers and are only on comparison sites and they tend to be short-lived.”
He explained that to keep your number when switching, all you need to do is text ‘PAC’ to 85075 to receive a Porting Authorisation Code and give it to your new provider for a seamless transfer. Viewer Rebecca shared her success story: “I went to look at SIM only for my daughter, husband and I. We were paying £224 a month for all three contracts. I shopped around to get the best deal and now pay £34 a month for all three saving me £190 a month.”
Martin was taken aback by the savings, remarking: “I know you’re clapping but the problem was how much they were paying in the first place and I bet I can guess what was happening there. You just really need to be aware of this.”
He continued to highlight a common issue: “This is what happens. People go and get themselves a new iphone. They’re paying £40-£50 a month for it because they’re paying off the phone. The contract’s two years and at the end of the two years the phone is paid off. But if you do nothing they don’t drop the price.”
He warned consumers: “You’re still paying the price as if you’re paying off the handset itself for the tariff which would cost you diddly-squat if you got it on its own. That is a massive rip-off – it shouldn’t be allowed, it is allowed. If you’re getting a phone on a contract, the day you’ve paid your phone off you need to be getting a new tariff, even going to the same firm and saying you want to pay less. It’s like having a loan that once you’ve paid it off they keep charging you.”
