O2 priority has 20% off accessories instore at the moment. AppleCare is included. Worked for me. Normally £61 from Apple.
PS. I know that you can try to argue that all items have a two year warranty under EU law, though Apple currently interprets this as being able to demonstrate a fault when first purchased.
I also know you can make claims under section 75 of the Consumer Credit act, but it's a lot of hard work.
Applecare is great for people who have iPhones and want things fixed/replaced quickly without any stress.
More info http://www.apple.com/uk/support/products/iphone.html
A summary of Apple's warranties including what is covered under EU law http://www.apple.com/uk/legal/statutory-warranty/
Applecare Ts&Cs http://images.apple.com/legal/applecare/docs/081811_APP_iPhone_EMEA_English_v5.4.pdf