I got a better deal with a contract. Over 2 years it costs me less than the phone outright, plus I get unlimited nationwide calling and texting. Obviously you don't get to pick the latest, fanciest toy but this phone has served me very well so I don't care to have the latest.
That's the one thing to do to save money on those cursed contracts: moderate your desires, settle for "less". Less is more. More money to save.
But this is about UK and I am not in the UK so I don't know if it works that way