What happens if you don’t pay your phone bill?

Most people carry mobile phones these days, often requiring regular payments to access the network, pay off a handset, or top up credit. Phone contracts are often set up to be paid over a fixed term, meaning you’ll pay recurring payments to use the service until the end of the contract.

We know the unpleasant surprise a change in circumstances can bring – especially with living costs increasing, or when an urgent expense makes it challenging to keep up with monthly bills. Getting into phone debt can also lead to serious consequences, which is why it should be one of your priority bills.

To help you understand the risks, read on as we explain what happens if you don’t pay your phone contract or bill. We’ll explore how a phone contract can affect your credit score, whether a contract phone can be blocked if you don’t pay, as well as tips to help you manage your phone bill.

In this guide: 

• What happens if you don't pay your phone bill?
• Can your phone bill affect your credit score?
• Can a contract phone be blocked if it’s not paid on time?
• Can you go to jail for not paying your phone bill?
• What to do if you can’t pay your phone bill
• Tips for managing your phone bill
• Where Moneyboat can help

What happens if you don't pay your phone bill?

A phone contract is a type of service agreement where you pay a monthly fee, sometimes for a fixed period, to access a phone network service. If you sign up to pay for a mobile phone handset, it can also be a type of credit agreement repaid over a fixed period. This means that when you sign into a contract for a minimum period, you’ll be expected to pay for the remainder of the contract.

Here’s what could happen if you don’t pay your phone bill:

• Your account may go into arrears: If you fall behind on your phone repayments, going into arrears means you’ll owe the service provider money and fall into debt.
• Missed payments may be reported on your credit file: Like a payday loan or credit card repayment, late or missed phone payments can be recorded on your credit report.
• Your account may default: If you don’t meet the agreed repayments, you may receive a default notice warning you that you’re in debt. Service providers will often give you at least two weeks to resolve the missed payments. But if you don’t pay back what you owe in time, your account will default, which will break the contract.
• Your provider may cut off your services: Service providers can disconnect your services if you don’t pay your phone bill.
• Your provider may take action: Beyond impacting your credit report, mobile phone debt can lead to other serious consequences. Phone providers can pass on your debt to debt collectors and issue a county court judgement (CCJ). In England, Wales and Northern Ireland, they can also apply for you to declare bankruptcy.

Find out more about how long a default can affect your credit report with our guide, including whether they can be removed.

Can your phone bill affect your credit score?

Yes, your phone bill and whether you pay it on time can impact your credit score in various ways, both positively and negatively.

• If you miss a payment and don’t resolve it within at least 30 days, it will be reported to credit reference agencies (CRAs) as a negative mark on your credit file. This can stay on your report for up to six years.
• If you default on your account, this will also remain on your credit report for up to six years.

Missed payments and defaults can damage your credit score, causing it to drop. It can also signal to lenders that you might struggle to keep up with your repayments. This could affect your chances of being accepted for loans or credit in the future, as you may appear to be a risky borrower.

However, signing up for a monthly phone contract can also help boost your creditworthiness. Paying a monthly phone bill on time can help build your credit score, showing that you’re a responsible borrower with a good history of meeting credit repayments.

Our Experian credit score guide explains everything you need to know about how your credit report works. And for more tips on how to improve your credit rating, explore our helpful guide.

Can a contract phone be blocked if it’s not paid on time?

Yes, phone service providers can block and disconnect your phone if you don’t resolve missed repayments, or if you default on your account. Depending on the terms of your contract, if you’re still within a minimum contract term, the service provider may blacklist the mobile handset as well as blocking access to the network.

Can you go to jail for not paying your phone bill?

No, you won’t go to prison if you’re struggling to pay for your phone bill. Phone bill arrears are a type of common debt that you can’t go to prison for, which also includes:

• Overdrafts
• Credit cards
• Loans
• Mortgage and rent arrears
• Utility debt
• Parking tickets

What to do if you can’t pay your phone bill

If you’re worried that you can’t pay your phone bill, it’s important to call your phone service provider as soon as possible. Together, you may be able to take steps to find a solution that makes paying for your contract more manageable. For example, you might be able to:

• Change your bill date
• Switch from a monthly plan to a pay-as-you-go one
• Move to a more affordable tariff
• Give you breathing room with a temporary payment holiday

If you don’t reach out to your provider, they may suspend your service until you settle up any outstanding payments. They can also charge you with a termination fee for breaking the contract.

Can I cancel my mobile phone contract?

You might be able to cancel your mobile phone contract for free if it’s no longer affordable. However, this may depend on the type of contract, and how long ago you signed up.

• Service providers must offer a 14-day ‘cooling off period’, letting you cancel a contract up to 14 days after signing up.
• Once you complete the minimum contract term, such as an 18-month phone contract, you can often switch out of your agreement without paying a fee.
• If the price of your phone bill has gone up, some providers may offer a free 30-day cancellation window.

It’s important to check the terms and conditions before you agree to any credit or service agreement. If you’re still within a minimum contract term and want to leave your contract early, you may need to get permission from your provider or pay an exit fee.

Get support if you’re struggling to pay

If you receive benefits, you may be able to arrange a more affordable phone deal on a ‘social tariff’. Eligibility for a social tariff can depend on the type of benefits you receive. If your current provider can’t offer this service, you might be able to switch to one that can. Read more about what social tariffs are available on the Ofcom website.

You can also find free and independent debt support from third-party organisations and charities such as Citizens Advice, StepChange, and MoneyHelper. If you’re worried about your bills and repayments, you’re not alone.

Tips for managing your phone bill

It’s important to treat phone bill payments as a priority debt. In the short term, you could be cut off from your phone service. In the long term, if you don’t keep up your payments, it may impact your credit report for years to come. Explore our tips for managing your phone bill below:

1. Check your phone bill regularly

When it comes to managing your bills effectively, it’s crucial to know what’s coming out of your bank account every month. This can help you:

• Check that you’re comfortable with the current cost of your phone bill payments
• Dispute any incorrect charges
• Dispute any payments taken after you cancel or switch your account

For more guidance, Ofcom offers help and guidance for disputing payments and difficulty paying your phone bill.

2. Make a budget

From managing living costs to actively saving for the future, creating a monthly budget can help you understand and handle your money better. Budgeting doesn’t have to be restrictive. Instead, it can help you monitor your regular expenses and control your saving and spending pots wisely.

First, track your income and expenses to understand your personal cash flow. Then, you can set a budget like the 50/30/20 rule, which can help prioritise your income into needs, wants and savings.

Learn more budgeting tips and tricks in our guide to budgeting made simple, where you can find our free budgeting template to help you get started.

3. Get in touch with your provider

It doesn’t have to be an emergency for you to contact your provider about your phone contract. Check your current tariff and find out if you could negotiate a more affordable deal.

Your provider might be able to offer something more manageable, match a more competitive deal, or help you cancel or reduce any services you don’t use. They might also be able to cap your allowance so you can’t accidentally overspend.

Likewise, if you currently pay for phone insurance, but it’s stretching your budget, it might be a good idea to weigh up the benefits against the costs. While an uninsured phone may seem daunting, there are alternative options.

For example, your home contents insurance could include protection for your phone against loss, accidental damage and theft using personal possessions cover. And make sure to check what benefits you get from your bank. Many now include phone insurance with their current accounts, so switching to a bank providing that is another option. Just make sure to check if that comes as standard as a paid upgrade on the account.

4. Consider switching providers

Once you’ve completed your minimum contract term, you’re not obliged to stay with your current phone provider. It’s also common for phone contracts to increase in price once the initial payment agreement is over, which may affect your budget.

Look for ways to save money on your phone bill by comparing more affordable deals on comparison websites such as MoneySavingExpert or Uswitch. Consider the different costs, perks and features on offer and find the best option for your current budget and needs – including exploring SIM-only and pay-as-you-go deals.

For example, if you’re about to start a new contract, consider whether you need to sign up for a brand-new handset deal. Contracts that include a new or upgraded handset are often more expensive than SIM-only or pay-as-you-go deals.

Keeping your current phone and opting for a SIM-only deal could help give you extra breathing space in the meantime. The extra cash could also help you save up to buy a new phone outright in the future.

Where Moneyboat can help

Whether your income changes temporarily or a one-off cost leaves your finances stretched too far, there are always options to help ease the pressure. If you’re struggling to meet priority payments like your phone bill due to unexpected expenses, our flexible short-term loans could help bridge the gap until your next payday.

Short-term loans should only be used for interim relief where you know you can pay the loan back.  As a responsible direct lender, we only offer short-term loans to customers who can comfortably make the repayments and meet our affordability and eligibility requirements. Explore our eligibility criteria guide to learn more.

Discover more helpful resources

Now you know more about what happens when you don’t pay your phone contract, you can better understand your options to help prioritise important bills and expenses. Creating a budget and considering alternative tariffs can help you manage your monthly phone bill and continue to build a healthy credit report.

Get up to speed and feel more in control of your finances with our wide range of guides and resources. Discover everything from financial wellbeing tips to how to get a phone contract when you have bad credit.