Because of the way the billing system works you will still pay for the final month (the notice period) in advance, so yes this is correct, however, it will show as a credit on your account which can be paid back into your bank account.
It's a bit of a strange way to do it but perfectly normal.
I have no affiliation whatsoever with O2 or any subsidiary companies. Comments posted are entirely of my own opinion. This is not Customer Service so we are unable to help with account specific issues.
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