When you sign up to a new phone contract, the chances are you’re agreeing to an 18- or 24-month commitment. But, what happens if you want to leave early, or switch providers once the terms have been fulfilled? Here's what you need to know about cancelling your contract.

Cancelling a phone contract after it ends

If you've reached the end of your existing contract and fancy a change or have grown displeased with the service you've received, it's now incredibly easy to switch your provider. This is thanks to the recently implemented Text-To-Switch scheme in the UK. As the name suggests, there's no need to call your current supplier's help-desk and explain your reasons or face the retention teams that try to tempt you with new deals. Instead it's a single text message that does all the hard work for you. 

Simply send a message with the word PAC to 65075 and you will receive an instant reply from your current provider with a code to give to your new provider. The best part is that the code includes everything required to transfer your existing phone number. 

Should you prefer to start life anew, leaving behind your existing number, then text STAC to 75075 instead. For a full breakdown of the service read How to keep your phone number when you upgrade

You can use Text-To-Switch even if your current contract has yet to reach the end of its plan, but you'll be liable for the early termination fees. We cover this in more detail in the next section. 

Cancel a phone contract early

If you want to exit your contract before the agreed time period has elapsed, then there is a good chance that you will incur a cancellation fee. These can be quite steep, as they seem designed to prevent anyone from casually switching providers. 

There are a couple of exceptions worth noting.

The contract began in the last 14 days

If you’ve only just signed up for the contract and are still within 14 days of the initial agreement, then you are legally entitled to cancel the contract without a fee. This is known as the ‘cooling-off’ period and is there to protect consumers.

A caveat does exist though, as this only applies to those who signed up online or over the phone, not if you visited a store on the high-street. That being said, you can always try asking anyway, as you never know.

While you’re considering switching, take a look at our roundup of the best phone networks to see what’s currently on offer.

The price of the contract has increased

Over time the cost of a contract can go up, due to a variety of factors, but should this be in excess of the Retail Price Index (RPI) set by the government each month (this is basically linked to current rates of inflation) you’ll legally be able to terminate you contract without a fee.

To do so you’ll need to contact your provider within 30 days of receiving the letter informing you of the increase.The current rate of RPI can be found on the site of the Office for National Statistics.

Note that this rule doesn't apply to contracts that include promotions that discount a certain amount of the initial months, as the contract hasn't increased in price but merely returned to its normal rate.  

What fees do I have to pay cancelling a phone contract early?

Should neither of the above conditions apply to you, then it could be quite an expensive decision to leave a contract early. You’ll often be expected to pay up the total cost of the remaining contract, possibly with a discount of some kind applied. 

For example; on a 24-month contract that normally costs £30 per month, if you want to cancel after 4 months then you could face a bill of £600 (20 x £30) minus whatever reduction the provider offers. These discounts vary considerably and are subject to change.

How to cancel a phone contract: EE

For instance, EE has a number of different conditions in its Remaining Contract Charges guidelines. These state that the company will first calculate any outstanding monthly payments that are due (factoring in any discounts you are entitled to), then deduct VAT and 4 percent for the early payment, and finally check for any Add to Plan options you might have on your account. The final total is expected to be paid immediately. 

At the moment Three offers a 20 percent discount on the outstanding fee, while Vodafone and O2 offer no discounts but do remove VAT, which makes them essentially the same as Three.

Whichever provider you have a contract with, they will expect some kind of payment if you want to leave earlier than initially agreed.

How do I cancel my phone contract?

The process of cancelling is quite straightforward. Either use the Text-To-Switch option covered at the beginning of this article or go the direct route and contact customer support. You'll usually need to navigate to the ‘Thinking of leaving us?’ option, or words to that effect.

30 days’ notice is required, plus any fees that might be outstanding if you’re cancelling early.

Those whose contract has already run its course should brace themselves for various offers and enticements to stay. This can play into your hands if the main reason for switching was to reduce costs. Explain this to the customer service representative and see what they come up with.

We recommend not agreeing to anything there and then, but instead ask that offers be noted on your account so that you can come back after you’ve thought about it some more.

In the meantime, go to other providers, see what kind of offers they come up with, then return to your own and see if they’ll match any particularly good ones.

To aid you in your research, here are the best SIM-only deals or it might be worth considering the Best Pay As You Go options as there are some great offers at the moment. 

If you’re set on leaving, but want to retain your phone number, you’ll need to request a PAC code. This is very important, as it’s required by your new provider in order to transfer your number. 

After that, things should automatically take their course and you’ll be notified when your number is switched over.

The best part about starting a new contract of course, is the chance to upgrade your handset. So, be sure to check out our guide to the best phones to see which ones should be at the top of your list.