Need to unlock it. Which is a pain if it is an iPhone. Easier for her to move to orange pay as you go (free to do, and doesn't take long, whereas most unlocking methods cost money).
You might be better off giving your wife your current phone, and having the new phone yourself. Orange should unlock your current phone if you ask them, whereas they might well not unlock the new phone.
Also worth looking at old bills and checking how many minutes & texts you actually use, how much data etc. and then checking how much you'd save by going to sim only (for example if you have one of the ridiculously expensive £35 iPhone contracts, you often will be able to go down to £10 or £15 a month sim only), bearing in mind that you pay a lot of money for your 'free upgrade' - when you do the sums on these things, you're often paying £400-£500 or so for your 'free phone'.