If you have a gas and electricity contract, you may be charged exit fees if you want to leave early. We talk through what they are and how you can avoid them.
What are energy exit fees?
The majority of energy tariffs in the UK are fixed-rate deals. This means plans have a contract term and you pay a pre-agreed rate for your energy for a set period. So, if you want to leave your contract early, it’s often the case you’ll have to pay exit fees.
Don’t let this deter you from snapping up a cheap energy deal though. In some cases, the savings made from switching providers outweigh any exit charges, and sometimes, new suppliers will offer to pay your exit fees for you. Check what fees you’ll be charged and run an energy comparison to see how much you could save.
How much are energy exit fees?
Exit fees will vary between suppliers, but to give a ballpark they’re usually in the region of £5 and £30 per fuel. So, if you’ve got a dual-fuel tariff you could be charged up to £60 for leaving your contract early.
Do all tariffs come with energy exit fees?
Whether you’re charged exit fees or not largely depends on what tariff you’re on. For fixed-rate deals, almost all suppliers will charge exit fees, though there are some exceptions which we’ll discuss later on.
Alternatively, you might be on a variable rate tariff. While some people do opt for a variable rate deals, they’re most commonly found in the form of Standard Variable Tariffs (SVTs) which is the default rate your supplier places you on once you finish your contract. With these tariffs, you’re usually free to leave at any time without paying exit fees.
When do I need to pay energy exit fees?
In most instances, you’ll have to pay an energy exit fees if you terminate a fixed-rate deal before the end of the contract term and decide to switch suppliers. This is even the case if you decide to end your contract if you’re moving house. However, the good news is there are a handful of ways to avoid energy exit fees altogether…
How to avoid exit fees
Your energy supplier will write to you about 6-7 weeks before your contract ends to let you know your tariff is due to expire. In this window, you cannot be charged for switching providers. In advance of this date, it’s a good idea to compare energy deals offered by other companies so you’re best equipped to decide whether sticking with your current supplier is a good choice – though a word to the wise: switching almost always saves you money.
In addition, typically you won’t be charged exit fees if you’re switching to a new tariff with the same supplier, or are moving house but retain your tariff.
Last, some suppliers will cover the cost of your exit fees if you switch to them – talk about a hook! Look out for these when you run your energy comparison.
In any case, always check the small print of your contract to see if you’ll be charged for terminating early and what the cost might be.
Can I get a fixed-rate deal with no exit fees?
There are other ways to avoid paying energy exit fees altogether, without sacrificing the cheap energy prices offered on fixed-rate tariffs.
Many smaller, lesser-known companies offer fixed-rate deals with no exit fees. Why? Well, because it makes them competitive in an extremely saturated market. Plus, because you’re free to leave whenever, it means the rates tend to be great value to encourage you to stay. Keep an eye out for offers like this when you compare energy plans; one example of such a company is Tonik.