Can you buy an iPhone on pay as you go or does it have to be contact?

If you want to save money, go for prepaid. You'll save a ton. As for an iPhone, you can get the iPhone 5S for $150 unlocked and new from WalMart. You can go for metroPCS or StraightTalk as your prepaid carrier and their plan starts from $30 which is pretty decent depending on your usage.

metroPCS offers unlimited talk-text-data with 1GB LTE data.

StraightTalk starts from $45 unlimited everything with 5GB LTE data.

You can buy them outright but the prices for new ones are set by Apple with very little profit for retailers which is why they like to sell them with various deals attached.

Prices will vary according to where on this planet you live, which exact iPhone model you're interested in, and what storage capacity it comes with.

So just visit the Apple Store website in your country and you'll see the current pricing options. Bear in mind that a good used iPhone 6s/6s+ does pretty much everything an iPhone 7/7+ can but will be a lot cheaper. It also still has a headphone socket. If you're in the UK then CEX is a good place to buy used ones as they're fully tested and like all CEX purchases come with a 2 year warranty. So you won't have the risk of buying from a private seller. You can also offset the purchase cost by trading in any of your old unused tech.

BTW: a Pay As You Go deal is effectively a one month rolling contract, you may have meant you want it on a prepaid credit basis.

You sure can use it on a prepaid plan. You can simply use your current phone. You may need to unlock it and you are going to look for GSM carriers, as your new one. The iphones are really expensive to buy outright. I tend to shop on ebay. You can save 60-80% off the initial cost if you simply pick the model that is a couple years old.

On prepaid and pay as you go, you buy the phone outright (full retail).

On post paid, you are allowed to pay monthly installments for your phone, on top of your service plan. What you claim is getting "TOO" expensive, was your lack of understanding that on top of that service plan that YOU wanted, you would also be paying $28+ for the phone, making your monthly payment, more than you wanted, but you knew that UPFRONT, so it was NOT a shock, you just didn't budget your monthly money with real world sending.

So find out what it takes to pay off the phone, and pay it off, get it unlocked BEFORE you leave your current carrier, then you should be able to leave and go with any other compatible carrier you think has the plan you can deal with on a monthly bases.