UK residents have many choices when it comes to energy suppliers, but that doesn’t mean that switching is always easy. Even when a new deal crops up that is better than another, a customer has to worry about exit fees. These can include fees also called cancellation and termination fees. These fees are assessed whenever a buyer tries to opt out of a previous energy contract before the actual period of service is over. They can range from as little as £5 to up to £50 – per fuel type. Due to the simplification of the UK tariff structure, you may find yourself suddenly signed up to a more expensive tariff once your old tariff is no longer available. This automatic enrolment can also oblige you to pay an exit fee if you want to switch after the period for enrolment is over. It’s the wise consumer that keeps an eye out for fees and asks about them before switching, even when the switch was not of their own doing.
Fixed rate plans
Fixed rate agreements usually carry early termination fees, and they tend to be more expensive than other plans. This can make it difficult to switch from one type of plan to another, as the fee will offset any savings in cost. Even if you have a change of heart in the middle of the winter season, you might find you’re stuck with your deal, unless the utility will allow you to switch without a fee. If you have a fixed tariff, you will need to see what types of fees are associated with terminating the account before you actually decide to make that decision. You may find that you can still switch, even if it costs you, or that the company will waive the fee as long as you remain with them and not some other utility. The costs to terminate a fixed rate plan also depend on how far along you are in it.
Sometimes, you get lucky
If your energy supplier has to change the tariff rate, they must give you 30 days to decide whether you want to keep the tariff or not. If you choose not to keep it during this time, no termination fees apply. The reason for this is that the company has changed the terms of the contract making the previous contract null and void. Thus, the termination fees associated with the contract also do not apply. However, this is a special case and isn’t bound to happen much. It might happen with a fixed rate if the supplier thinks they’re going to lose money by selling you their gas at a lesser price than the market can withstand. However, most fixed tariffs have excess leeway built into the price structure, so this might not ever happen to any of your tariffs. Instead, you might have to wait for the contract to be officially over.
Another option for switching
If you simply wait for the contract period to be over, you will also be given 30 days to make a switch without termination fees. Of course, by that time the heating season will be over and you probably won’t know what next winter will be like either. The time period is limited and if you miss notifying your supplier of how you want to switch, you can lose the opportunity to do so without incurring an exit fee. Keep an eye on your contract terms to determine when you can switch without penalty.
When your previous tariff is dropped
You will also get the opportunity to switch when your previous tariff is dropped and becomes unavailable. Companies that are simplifying their fee structures will send out a letter advising you that you need to change your tariff or they will do it for you. Some will put you on their standard plan and others will pick a more expensive plan. Whatever it happens to be, it will also come with termination fees. If you want to be in control of switching, you have got to abide by the time limit set for making those choices. Otherwise, once the other tariff is in place (whether you agreed to it or not), you won’t be able to make another switch without triggering exit fees.
