I ditched Sky nearly two years ago. I don't watch much TV and most of what I do watch is available on Freeview. I took out a contract with BT TV and got a free
YouView box. It was a 12 month contract and after the 12 months I cancelled the contract and kept the box. You can buy them from retailers without taking out a contract with BT or Talk Talk though. You get all the Freeview channels, pause/record/series link etc like Sky+ plus you get a good selection of On Demand channels like iPlayer, ITV Player, Now TV, 4 on Demand, plus others. Netflix has recently become available too. If you already subscribe to Netflix it's free.
The only thing I miss about Sky is the variety of music channels, because on Freeview all you have is 4Music and VIVA, plus radio channels. So after Christmas I'm probably going to get a Freesat box so I can have more music.
You can also have a
Freesat box on its own instead. You get all the free satellite channels (providing you already have a dish) and you can get Freesat boxes that pause/record etc. Or just get a basic one that doesn't. I'm just going to get a basic one as I have the recording function on my YouView box.
You'll probably find that when you ring Sky to cancel they'll want you to stay so will make offers to get you to stay. Even though I'd made my mind up to leave when I rang them, I was still on the phone for nearly an hour as they were offering me a HD box, cheaper subscription etc to stay. So you never know, you might be able to negotiate with them and keep your Sky.