My iphoe 4 does not have the option for personal hotspot.

Does your carrier support tethering and if so, do you have a tethering plan with your carrier?

If your carrier supports tethering, the hotspot option won't be avaialble until you have a tethering plan activated with your carrier.

What he said ^

Try going inot your settings menu and go to general - network then you should see personal hotspot. If you don't see this you could then try resetting your network settings by going to settings-general, then scroll down to the bottom and tap the reset, in there you'll have the option to reset network settings. If you've got the option to set up a personal hotspot from your carrier, this should appear as normal in your settings menu, if not contact your carrier and confirm either way (if your out of contract change if you can, personal hotpsot is so handy)

Also remember when you do rest your network settings you'll have to re-enter your wifi password if you use it on your phone.

Who's your carrier?

Also, you don't necessarily need a tethering plan with your carrier. My carrier allows personal hotspot without this and unlimited data for 40Euros a month

Not needed if tethering is included with your carrier's data plan. Either way, it is a tethering plan - it is included with an existing all inclusive data plan, or as a separate plan.

Was trying to keep it simple, but I have an 'all you can eat data' plan, t's not a tethering plan, nowhere in my contract mentions those two words together. However my carrier allows me to tether. which is lucky for me.

Lucky you, but tethering is likely included somewhere in the contract regadless if tethering and plan are not mentioned together.

If included with your carrier's all you can eat data plan or as a separate tethering plan or add-on, the personal hotspot option will be available on the iPhone. If not included with your carrier's data plan but your carrier supports tethering and offers a separate tethering plan or add-on, you need to purchase the plan or add-on before the option will be available on the iPhone.

This may be different with an iPhone sold as officially unlocked.

This is not keeping it simlpe this is just going to confuse him... if he does not have the contract setup with his carrier then he wont even see the option to turn on the hot spot no matter what he does.. do your research before making people do things that you yourself have no clue about

It all depends on your carrier. Mine doesnt have that option either

Cheers.