All the major mobile phone networks have abolished unlocking charges for pay monthly customers who are outside their minimum contract term, after intervention from the Government.

Unlocking your phone means you can use any network's Sim card – giving you the freedom to switch providers and therefore lower your costs by bagging cheaper tariffs.

The Government pledged to take action on unlocking fees in last year's Autumn Statement, and had been considering legislation to force providers to offer free unlocking. However, it announced today (9 October) that a "voluntary solution" has been reached.

Many mobile networks already let pay monthly customers outside their minimum contract term unlock their phone for free, although earlier this year EE charged £8.99 and Virgin Mobile £15.32. Both firms have told they've now stopped charging.

If you want to unlock your phone before your minimum contract term is up, or you're on pay as you go, you may still need to pay though. See our Mobile Unlocking guide for full step-by-step help.

'An outrageous, anti-competitive charge'

MoneySavingExpert founder Martin Lewis says: "The end to unlocking fees is a welcome release. It's been an outrageous, anti-competitive charge forced on customers who have usually already paid that network way over the odds for the handset.  

"At the end of the contract, people have been given a dire choice. If you want to take the phone elsewhere for a cheaper deal you have to pay – if not and you stick with them, then you still pay, in the form of overly expensive tariffs.

"The next step is that networks should be made to own up about the fact that when you buy a handset on contract, it's effectively a loan – and they should be forced to publish the usually outrageous APRs."

Why have mobile providers agreed to abolish charges?

Ministers said last year that they wanted to take action against unlocking charges, which are estimated to cost mobile users £48 million a year.

They wrote to the chief executives of the major networks earlier this year explaining their concerns about unfair unlocking fees and setting out the changes they wanted to see providers introduce.

Karen Bradley, Secretary of State for Culture, Media and Sport, says: "We were clear that we wanted to see the unfair practice of charging to unlock handsets for customers scrapped and we've worked with all the major providers to make it happen.

"This will save consumers a substantial amount of money and make it even easier to switch provider to get a better deal."  

Why aren't unlocking charges for pay-as-you-go users being scrapped as well?

It's important to note that the deal which has been reached only covers pay monthly customers who've come to the end of their contract period. There are currently no plans to expand the agreement to include pay-as-you-go customers.

When we asked the Department for Culture, Media and Sport why this was, the reason we were given is that the number of pay-as-you-go users is falling rapidly – they accounted for just 33.5% of all mobile subscriptions last year, according to figures from communications regulator Ofcom.

How do I know if my phone's unlocked?

The easiest way to check if your phone's unlocked is to get your hands on a SIM from a different network to the one you're on (eg, if you're a Vodafone customer you could borrow a friend's SIM who's with EE). Once you've got the new SIM, swap it with the existing one in your phone.

If your phone is locked, a message should pop up saying so – if not, you should be able to get signal on the phone with the new SIM (as long as you're somewhere you'd normally expect to get signal).

How do I unlock my phone?

You should be able to do this by contacting your network. It may be able to unlock your phone remotely – this is more common with modern smartphones. Alternatively it may give you a 'Network Unlock Code' (NUC), which you'll need to enter into your phone.

There are other methods you can use too, including dedicated third-party unlockers. For full info on the different options, see our Mobile Unlocking guide.