I'm with O2. When my contract ended, I just went on the 1 month rolling contract.
Hold on until the iPhone 5 to be honest
As everybody else has said, just stick with the 4. The 4S isn't a worthy upgrade if you already have a 4, though of course if buying new, the 4S is the better choice.
Move onto a SIM only contract, or you could move to giffgaff to save more money.
Oh O2 do this do they? Mine up now, what cost and bundle are you on?