Does iPhone 5 run only on 4g?

Would it work on 3G network if I was to just use my old contract because my current contract allows me to. I'm on 3

Yes, 3 network are planning to sell the phone, so it will work fine on 3g (3g is the speed; 3 is the network). You will need to move your number to a nano sim, as the iPhone 5 takes a nano sim. This is even smaller than a micro-sim, so your standard/micro-sim will not fit it.

Ofcourse, its like the current iphone it has 3g but neva got rid of 2g

Yes. The iPhone 5 will be able to run on 2G, 3G & 4G networks.

Hi. Apple iPhone 5 having 4G LTE capability but it can works on 3G network too, no problem if you are just having a 3G network, you can use it on 3G without any trouble.

The iPhone 5 comes with 4G but is not limited to 4G. There's currently no one offering 4G in the UK so if it couldn't run on 3G or 2G no one would be able to use their iPhones for a few months.

The first network to offer 4G will be a new network called Everything Everywhere (EE). Other networks may not have 4G until the new year and even then there's a chance that their 4G networks will not work with the new iPhone due to the frequencies used.

You could use your current 3 contract with the new iPhone although the new iPhone uses a smaller SIM card called a Nano SIM card, so you might have to cut your existing phone card down. You can find guides for doing this online.

If you decide to buy a new iPhone 5 contract I recommend comparing all the options first so that you don't spend more money than you need to:

http://www.best-mobile-contracts.co.uk/phones/Apple-iPhone-5.aspx

It has LTE but can work with 3G if you are not receiving LTE.