You can purchase a brand new, recently announced Windows Phone handset from Tesco for £85 (and receive 85 Clubcard points as well).
The handset is a Nokia Lumia 510 and the network on which it is locked is Tesco Mobile, an O2 mobile virtual network operator (which means that you should be able to get the phone to work on O2 and Giff Gaff).
The device runs on a single-core Qualcomm Snapdragon SoC clocked at 1GHz, 256MB of RAM, 4GB of onboard storage, a 5-megapixel camera, a 4in 800 x 480 pixel display, a bit more than eight hours talk time thank to a 1,300mAh battery, Wi-Fi, a microSUSB port and a weight of 129g.
Even it runs on Windows Phone 7.8, you will get Windows Phone 8 goodies like Live tiles and SkyDrive storage (7GB). The handset is ideal for those on a budget or looking for a Windows Phone handset to discover the mobile platform.
We would however recommend moving to a more expensive model (like the Lumia 620, the Huawei Ascend W1 or the Windows Phone 8S) should you want to use Windows Phone 8 as your main smartphone.
Note that the phone comes with Nokia Music, Nokia Drive but not Nokia City Lens or Cinematograph.