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Apple iPhone Upgrade Programme UK guide – will it save you money?

Andrew Williams

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Apple iPhone Upgrade Programme UK guide: At its iPhone 7 and Apple Watch 2 launch, Apple unveiled a 'one more thing': namely, extending its Apple Upgrade Programme to the UK and China after exclusively being available in the US. Here's what you need to know.

The Apple Upgrade Programme has finally come to the UK and the good news is it's pretty easy to understand. To participate in the 'free' upgrade system, you simply enter into a pay-monthly agreement with Apple, just like you would do with a network provider, and get a free iPhone in return.

However, the Apple Upgrade Programme isn't linked to specific carriers. You don’t pay for calls or texts, so you can sign up to a dirt cheap contract deal rather than the sky-high ones new iPhones often come attached to.

Let’s dig a little deeper, explain the Apple Upgrade Programme in more detail, and see if it's really the great deal it claims to be.

Watch: iPhone 7 vs 7 Plus

When did the Apple Upgrade Programme start?

Apple first introduced the scheme with the iPhone 6S and 6S Plus. However, until the iPhone 7 arrived, it was only available in the US.

But now, as of September 2016, it’s also available in the UK and China.

How does it work?

The Apple Upgrade Programme is designed as an alternative to buying an iPhone on contract. You’ll still need a SIM-only contract or PAYG deal, but you avoid that sense you’re getting stiffed by signing up to a £75 a month deal just to get hold of an in-demand iPhone 7 Plus.

You pay £49 up-front, then a monthly fee for the next 20 months to pay off your balance.

Of course, 20 months is almost two years, and the idea of the Apple Upgrade Programme is that you can get a new iPhone every year. After you’ve paid your 11th monthly payment, you have the option of trading in your now-old iPhone for a new one.

You’re effectively restarting the Apple Upgrade Programme, and have to pay that £49 up-front fee again, but get to trade in the phone for roughly 40% of its original value. The catch is that your phone has to be in “good physical and operational condition, as directed by Apple”. Don’t scratch it to death.

Related: Best iPhone 7 deals and contracts

iPhone 7 Plus

Isn’t this just like buying on finance?

The Apple Upgrade Programme is very much like buying an iPhone on bank finance – something Apple already lets you do, in fact. But it’s 'free' finance. Behind the scenes, when you enter the programme, you sign up to a 0% APR loan with Barclays, and trading in your phone after a year settles that debt.

If you decide you want to try an Android after that, or live a phone-free monastic life, you just have to either continue paying monthly instalments until you hit month 20, or call up Barclays and settle the bill yourself.

What phones can I get through the plan?

The scheme is designed to get you using the latest iPhones, so you can get an iPhone 7 or an iPhone 7 Plus through the Apple Upgrade Programme. All the variants are available too: 32GB, 128GB and 256GB.

Naturally, the one you pick determines the cost. A 32GB iPhone 7 is £33.45 a month, a 128GB one £38.45 a month and the 256GB model £43.45 a month.

The iPhone 7 Plus costs £39.45, £44.45 or £49.45 for the same amount of storage, respectively.

Apple Care+ is included in the price.

Related: AppleCare+ for iPhone 7: What is it and is it any good?

iPhone 7 line up

How much do you end up paying total?

The most important question: is this actually a good deal? Let’s look at the 32GB iPhone 7 Plus as an example.

After the £49 up-front fee and the 20 monthly payments, you spend £838. Walk into an Apple Store to buy the same phone and it’ll cost £719. That’s a difference of £119.

This isn’t just a sneaky cost of the programme, though, because you also get AppleCare+ protection plan as part of the deal. And that normally costs, you guessed it, £119.

AppleCare+ is phone insurance that covers your iPhone for two years, including priority Apple Chat support and two instances of accidental damage to your phone. As with most insurance deals, there’s an excess – £25 if you smash your screen, and a heftier £79 for repairing other forms of damage. But it’s still a lot less than a new iPhone.

The Apple Upgrade Programme doesn’t have any hidden cost other than that it signs you up (and charges you) for AppleCare+.

Related: iPhone 7 vs Galaxy S7

Can you get a better deal elsewhere?

The Apple Upgrade Programme isn’t a scam outside of the way it loops you into a cycle of buying iPhones, but alternatives are worth considering.

O2 Refresh and Tesco Anytime Upgrade are based on a similar idea. They split up the cost of your contract and the cost of your phone so that if you want to change your handset mid-contract you only need to pay off the phone side of the contract. EE and Vodafone used to have similar packages (called EE Swap and Vodafone Red Hot) but they have been discontinued, though they still offer trade-in schemes.

The differences include that you’re not signed up to any phone insurance plans (they are available though), but you do buy them alongside a mobile plan. And the prices you end up paying for the phone vary a bit.

Tesco and O2 haven’t yet published their Anytime Upgrade and O2 Refresh prices for the iPhone 7 and iPhone 7 Plus, but let’s look at the 128GB iPhone 6S for comparison purposes. You’ll pay £648 from Tesco and £711.99 from O2 over 24 months. That phone would cost you £599 direct from Apple.

The new iPhone will cause some changes to this pricing in the coming weeks, but as you can see the O2 Refresh deal does gather up some extra cost as it trundles through its 24-month term.

For the deal hunter who can’t afford to buy an iPhone outright, there’s a real appeal to the Tesco Mobile offer. There’s no mandated insurance and the eventual cost of the phone is less than you pay from Apple once AppleCare+ is included, and also a lot less than what Tesco Mobile charges for its pay as you go devices (£732 in this case, or £84 extra).

The remaining question: how much is phone insurance worth to you? Tesco Mobile offers insurance, but at £12 a month for the most expensive devices, it’s actually pricier than AppleCare+ (around £5 a month) and still comes with an excess of up to £85.

Related: iPhone 7 vs iPhone 7 Plus

iPhone 7 Silver

How can I sign up to the Apple Upgrade Programme?

There are no magic, system-breaking deals to be had here, and if you don’t mind the extra time and effort it takes, you could likely save more by buying a device from Apple outright and then selling it on eBay when you want a new phone. If you keep it in excellent nick and are willing to wait for one of eBay’s occasional fee-reducing promo periods, that is.

However, the Apple Upgrade Programme isn’t made for rabid penny pinchers. It’s about convenience, and its one sleight of hand is in getting you to sign up for AppleCare+, but then that's not actually a bad deal compared to most of the alternatives. It is also a better deal than buying from Apple on standard finance, which comes with a 14.9% APR when spread over two years.

You can only sign up by collecting your new device at Apple Stores at present, but you can reserve online via the Apple Upgrade Programme page.

All in all, it's not a bad deal, and if you're a hardened iPhone user, one that's worth serious consideration.

Related: iPhone 7 problems – and how to quickly fix them

Excited the Apple Upgrade Programme is now available in the UK? Let us know in the comments below.

Craig Williams

September 9, 2016, 1:00 pm

It's worth noting that you can get the Upgrade Plan without Apple Care which means the cheapest iPhone 7 starts at £27.50/month.

andyvan

September 9, 2016, 1:24 pm

Not quite. That option only allows you to spread the cost interest free. You don't get the upgrade option.

Gareth Jones

September 10, 2016, 8:11 am

If you upgrade after the 11th monthly payment do you lose the remainder of the 2 years of AppleCare+ that you have paid for as part of the contract?

Saqib Razaq

September 10, 2016, 10:46 pm

This is a good question.

One of the main advantages of having AppleCare+ is that it gives you an extra year of warranty. But if you get a new phone every year then you lose out on that anyway.

Nicksta

September 15, 2016, 11:06 am

Surely the best option if you wanted a new phone in 12 months would be to look after your 7 and then sell it on eBay etc - then buy a new model? Or am I missing something?

Paul Butt

October 2, 2016, 6:39 pm

If you buy an iPhone outright you get a years guarantee , so why purchase it with Applecare+ if Applcare doesn't normally come into play until after the 12 month guarantee. So on saying that isn't buying an iPhone outright yearly and not paying for AppleCare + the same and cheaper if its under Guarantee?

John O'Donnell

November 9, 2016, 7:07 pm

In the section about how much do you pay in total, the author claims that after 20months plus the upfront £49 you will spend £838. Well if you calculate it correctly, £33.45x20+£49 is in £718 & of course under £700 without the upfront £49. Either the author chose to add the cost of AppleCare on himself or he can't work out a simple sum.

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