Pensioners in the UK are overpaying by as much as £87 million per year on their mobile phones, new research has found.

A number of mobile network operators continue to charge customers for handsets that have already been paid off leading to the overpayments, according to the latest research from Virgin Media O2.

More than 60 per cent of over 65s report that their bundled mobile contract expired over 12 months ago, meaning they’ve spent more than a year unknowingly paying for handsets they already own.

On average, the overpayment is costing a pensioner more than £170 a year.

Lancashire Telegraph: Research from Virgin Media O2 found over 65s were overspending on their mobile phones by an average of £170 a yearResearch from Virgin Media O2 found over 65s were overspending on their mobile phones by an average of £170 a year (Image: Getty/Boogich)

The practice of combining airtime costs for minutes, texts and data with the cost of the handset – known as a bundled contract - can lead to consumers overpaying for their smartphones as they receive little discount, if any, at the end of their contract yet continue to be charged the same amount each month.

Gareth Turpin, chief commercial officer at Virgin Media O2, said: “Many pensioners are at risk of paying over the odds for phones they already own because of opaque and confusing mobile contracts, with most unaware they are doing so.

“We urge anyone who is out of contract and thinks they might be overpaying for their phone to contact their provider, get the facts, and then take action by switching to a split contract or airtime only plan. 

“With millions of customers from other operators stuck on contracts that can lead to them overpaying for their handset, we’re sounding the alarm on this smartphone swindle and asking the industry to step up to help consumers save money and make more informed decisions when it comes to their mobile phone contracts.”

Abigail Wood, chief executive of Age UK London, added: "When we talk about the cost of living the conversation is often fixed on heating and eating, but confusing utility bills are hugely problematic.

“Virgin Media O2’s research findings are alarming and shows the extent that over 65s are losing out.

“This is at a time when many older pensioners are already struggling to make ends meet and a mobile phone can be a lifeline, providing access to the many services not available offline and most importantly helping them stay connected.”