Use cases and phone deals vary and it is worth doing the calculations in a quick spreadsheet looking at expected cost over the contract period. It isn't always the case that upfront purchase is best although I always consider it.

If you do go for the contract don't forget to call the day after it expires and switch to SIM only level prices otherwise any savings will disappear the the next month or so.

My current iPhone 4S contract is only 12 months which was available only to existing customers and worked out substantially cheaper than other purchasing options comes with an insane number of minutes 900 per month but was actually cheaper over the period than the 200 minute ones which would have been plenty.