Martin Lewis has said every person with a mobile phone needs to send one simple text message – and potentially save themselves hundreds of pounds a month. Speaking on his Money Show Live on ITV last night personal finance guru Mr Lewis spoke out about people who are still paying for contracts when they don’t need to.
Some are paying a fortune for deals where they bought a handset – but don’t realise the period they have to pay the high price for has come to an end. Mr Lewis said that people need to send a text to 85075 and they will instantly find out if they are ‘out of contract’ and can switch to a much lower tariff without a penalty.
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.” Pointing to a diagram on screen Mr Lewis said: “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 went on to explain his three steps for mobile customers to cut costs. He said: “14 million people are out of contract on their mobile phone bill which means you are free to switch.” He said there is an ‘easy’ way to find out if you are one of those out of contract.
Mr Lewis explained: “You text ‘info’ for free to 85075 to check.” He added that people on Three would need to then enter their date of birth. He said that those in contract would still have to pay a termination fee, but otherwise people are free to switch: “You’re a free agent – you can go and get the cheapest deals, you can cut your costs.”
He explained that people on multiple phone family deals won’t get an answer but said his simple rule of thumb was if you’ve not changed in two years, you’re likely to be out of contract. He added: “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 added that once people decide to switch if they want to keep their number all they have to do is text PAC (Porting Authorisation Code) to 85075 and give that code to your new provider which will than be able to take the number. Viewer Rebecca said: “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 stunned at that one. He said: “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.
“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.
“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.”