Simple Phones on Pay As You Go
A Pay As You Go, or Prepay, phone has no contract - you buy the phone with a SIM card and usually a certain amount of conditional top-up and after that you add credit to the SIM as and when you want. The only thing you might find with PAYG on some networks is that if you don't use the phone at all for over a certain time, usually 3 months, the number will stop working.
The deals are ordered by the amount you pay for the handset but there is almost always a top-up required, usually £10, when you buy - we ignore this as you're getting calls and texts for that top-up and would have bought it anyway. The networks will subsidise the cost of the phone in the expectation that they will get a certain amount of top-up revenue out of the customer over the following months or even years - this is why you'll sometimes see a PAYG phone for as little as a penny plus £10 top-up.