Gonna be upgrading my phone soon, I think. When I was struggling with my mortgage and bills, I left Orange where I was paying £40+ a month for my up-to-date at the time iPhone. Kept the phone and used a SIM free card for just £11 a month which was helpful.
The time has come now though where I want to upgrade my phone so no doubt I'll be back on some big money contract yet again soon as I want to stick with iPhones.
Take a look at the giffgaff option Mark, it's worth looking into.
They sell you the phone seperately and you can pay a few quid up front as well. Worth looking at because those 2 year contracts tie you down.