Help with unlocked/sim free mobile

Hi, I have an old O2 pay and go sim card which gives me free texts and free minutes and which i am very happy with. I have never had a new mobile phone - i've always had them given to me second hand. Now i have decided to buy my own swanky new mobile phone, but i really want to keep my same old sim card and number.
It seems like the best thing to do is buy a sim free phone, but these seem so expensive!! Is it safe to buy them off the market place at amazon where they seem slightly cheaper? Also, does sim free mean the same as 'unlocked'? If i put my old sim card in will it work?
I'd really appreciate it if someone could help me figure this out as i'm a bit of a novice. I want a decent phone at the best possible price and the convenience of keeping my old sim!
Thanks

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