British mobile phone users are wasting an average of £195 a year on their mobile phone bills because they are on the wrong contract, a new report has found.
Just over three quarters (76%) of people on monthly deals are paying over the odds, signing up to tariffs after wrongly estimating how many minutes and text messages they use.
The study by Billmonitor, an Ofcom approved bill-analysis service, discovered that in total, subscribers are wasting nearly £5bn a year because of the problem.
According to the report, just over half (52%) of mobile phone users signed up to a wrong contract are on a tariff that's too large for them, using just a quarter of their monthly allowance.
While 29% are on too small a tariff, wasting money on calls, texts and data usage that exceeds their allowance.
A total of 19% have the correct number of allowance minutes, but are wasting money by not taking advantage of free benefits and allowance limits for data and texts, according to the study.
The group could also have saved money by signing up to their contract for a longer period of time.
Billmonitor, set up by mathematicians in Oxford, compiled the figures after analysing nearly 28,500 anonymous mobile phone bills and comparing them to 8.5 million contracts on offer from retailers and network providers.
The study found that the average person spent £439 a year on their mobile phone.
Customers spent £719 million a year calling premium numbers and sending premium-rate texts from their mobiles, while £502 million was spent calling and texting while abroad and £1.36 billion was spent on roaming charges.
Users also doubled their use of data in a year, surfing the web on their smartphones, and sending an average of 300 texts a month.