you are going to be charged if you using 3G. You can switch it off if you want to.
It would work out similar price if you join contract or buy the phone.
If you buying the phone, cheapest on line is £372. Then let's say join the cheap giffgaff goodybags for £10 a month 250min, unlimited txt & data. So it cost you £612 for 24 months
Having a quick check on comparison web site. You would find some online retailer doing £26 a month on three 24 month contract. 500min, unlimited txt and 1GB data.
This will cost you £624 for 24 months.
BTW, don't forget to join website like topcashback or quidco if you sign new contract. (£60 cashback make it £564 for 24 month)
I would say check with your existing provider to see what offer they can do.