How to avoid exit fees when you switch energy suppliers

Introduction

Energy bills make up a large part of household spending. Following the July 2026 price cap increase of around 13%, Ofgem gives a typical annual Direct Debit bill of £1,862 using its existing typical-consumption values; its updated values give £1,663. Because of this rise, many people are looking to switch to a fixed tariff to lock in their rates and protect themselves from future price hikes over the winter.^[1]

However, if you are already on a fixed-term contract, moving to a new supplier is not always straightforward. Energy companies often charge an exit fee if you decide to leave your contract before it ends. These fees are designed to cover the costs the supplier took on when they bought your energy in advance, but they can eat into any savings you might make by switching.

The good news is that you do not always have to pay these charges. Industry rules give you a clear window to switch without penalty, and certain types of tariffs do not carry exit fees at all. Getting the timing right is the best way to keep your costs down while making sure you are on the best possible rate for your home.

What are exit fees and how much do they cost?

An exit fee, sometimes called an early termination charge, is a penalty applied by your energy supplier if you break a fixed-term contract before its agreed end date. When you sign up for a fixed deal, which usually lasts for 12 or 24 months, the supplier buys enough gas and electricity on the wholesale market to cover your expected use for that whole period. If you leave early, they are left with energy they have already paid for, and the exit fee helps them cover that financial loss.

Exit fees vary by supplier and tariff rather than following a standard industry rate. Check your tariff terms before leaving: some current fixed deals charge £100 or more per fuel.

Because gas and electricity are treated as separate fuels, a dual-fuel household will pay this fee twice. This means breaking a fixed contract early can cost £200 or more in total on some dual-fuel tariffs. If you are on a longer 24-month fix, you are more likely to see fees at the higher end of that scale, as the supplier has taken on a bigger risk to lock in your rates for two years.

These fees are added to your final bill when you leave. You do not have to pay them upfront, but they will reduce any credit you have built up on your account or add to the final balance you owe your old supplier.

The 49-day rule: When you can switch for free

You do not have to wait until the exact final day of your contract to switch suppliers. Under rules set by the energy regulator, Ofgem, you are completely free to switch to a new deal without paying any exit fees as long as you are within the last 49 days of your current fixed term.

This rule applies across every energy supplier in Great Britain. It is designed to give you enough time to shop around, compare rates, and arrange a switch so that your new tariff starts exactly as your old one ends. This stops you from automatically rolling onto a more expensive default tariff while you wait for a switch to go through.

You do not need to memorise your contract dates to take advantage of this. Suppliers are legally required to send you a reminder letter or email between 42 and 49 days before your tariff is due to end. This notice acts as the starting gun for your penalty-free switching window. It will tell you exactly when your current deal finishes, what your new rates will be if you do nothing, and confirm that you are now free to leave without paying a fee.

If you find a better deal and start the switching process within this 49-day window, your old supplier cannot charge you an exit fee, even if the switch completes before the final day of your contract.

How exit fees work on different tariffs

Not all energy deals have exit fees. Whether you have to pay one depends entirely on the type of tariff you are currently using. While most households used to be on either a simple fix or a standard variable rate, the market now includes tracker tariffs and specialised deals for electric vehicle owners.

If you are currently on a standard variable tariff, you are in the best position to switch. Because you have not committed to a set term, the supplier has not bought energy in advance for you. This means there are no exit fees at all. You can compare deals today and start a switch tomorrow without worrying about penalties.

If your fixed term has recently ended and you did not choose a new deal, check your end-of-contract notice to see which default tariff applies. You may be free to leave without a fee, but some customers can be rolled onto another fixed deal.

Doing the maths: When is it worth paying the fee?

If you are outside the 49-day window, you may have to pay an exit fee to leave, depending on your tariff terms. However, this does not automatically mean you should stay put. If you find a new tariff that is significantly cheaper than your current one, the money you save over the year might easily outweigh the one-off cost of leaving.^[1]

To work out if switching is the right choice, you need to compare the total savings against the total penalty. First, check your current bill or online account to find out exactly how much your exit fees are. Remember to double the figure if you have both gas and electricity.

Next, get a quote for the new tariff you want to move to. Look at the estimated annual cost of the new deal and subtract it from the estimated annual cost of your current deal. This gives you your projected savings. If the savings are larger than the exit fee, you will be better off switching.

In the example above, paying a £60 dual-fuel exit fee is worth it because the new fixed tariff saves you £150 a year. Even after paying the penalty, you are still £90 better off over the next 12 months.

You also need to think about price cap predictions. If energy prices are expected to rise steeply in the winter, paying a small exit fee now to lock in a cheap fixed rate could protect you from much larger price jumps later in the year.

Can you switch suppliers if you are in debt?

Many people assume that if they owe money to their energy supplier, they are trapped on their current deal. This is a common misconception. While debt can complicate the process, it does not always stop you from moving to a cheaper tariff. The rules depend entirely on how you pay for your energy and how long you have owed the money.

If you have a standard credit meter and pay by Direct Debit or on receipt of a bill, the 28-day rule applies. If you have been in debt to your supplier for less than 28 days, you are free to switch. The amount you owe will simply be added to your final bill, which you will need to pay to your old supplier. If the debt is older than 28 days, your current supplier has the right to block the switch until you pay the balance off.

If you are on a prepayment meter, the rules are much more flexible. Under Ofgem's Debt Assignment Protocol, you are allowed to switch suppliers even if you have an outstanding balance, as long as the debt is £500 or less per fuel. This means a dual-fuel home can switch with up to £1,000 of total debt.

When you switch on a prepayment meter, the debt moves with you. Your new supplier takes on the balance, and you continue to pay it off through your top-ups at the same agreed rate. This protection ensures that prepayment customers, who often face higher rates, are not blocked from finding cheaper deals just because they have fallen behind on payments.

If your supplier blocks your switch because of debt, they must write to you to explain why and tell you what you need to do to resolve it.

Renting your home: Your right to switch

If you rent your home, you might be unsure whether you are allowed to change the energy supplier or if that choice belongs to your landlord. The rule is very straightforward: if you are directly responsible for paying the gas and electricity bills, you have the right to choose your supplier.

Some tenancy agreements include a "default supplier" clause, which names a specific energy company that the landlord prefers to use. However, guidance from Ofgem and Citizens Advice makes clear that landlords cannot use these clauses to stop you from switching to a cheaper deal while you live there and pay the bills.

You do not need your landlord's permission to switch, though it is polite to let them know. The only requirement is that when you move out, you may need to return the account to the original supplier or simply give the landlord the details of the new supplier so they can take over the supply.

The only time you cannot switch is if your landlord pays the energy company directly and then charges you for it, or if your bills are included in your rent. In these cases, the landlord is the account holder, and only they can decide to change the supplier.

Avoiding fees by staying with your current supplier

If you are unhappy with your current rates but want to avoid paying an exit fee, you do not always have to leave your supplier to get a better deal. Energy companies frequently launch new fixed tariffs, and they often allow their existing customers to switch between them.

This is known as an internal switch. Many of the UK's largest suppliers will waive the exit fee if you choose to upgrade to a new fixed deal that they offer. They do this because keeping you as a customer on a new contract is better for their business than losing you to a rival.

To see if this is an option, log into your online account or call your supplier's customer service team. Ask them what other tariffs are available for your meter and explicitly ask if they will waive the exit fee if you move to one of them.

Keep in mind that while this avoids the penalty, it might not give you the absolute cheapest rate on the market. You should still compare the new deal they offer against the wider market to make sure it is genuinely good value.

How to find out who supplies your energy

Before you can check your contract dates or start a switch, you need to know who currently supplies your gas and electricity. If you have just moved into a new property, or if you have never switched before, this might not be obvious.

The easiest way to find out is to look for a recent bill or a welcome letter. The supplier's logo will be clearly printed at the top. If you cannot find any paperwork, there are free official services you can use to check.

In the past, you had to look up specific regional phone numbers for different Distribution Network Operators (DNOs). Many of these companies have recently rebranded—for example, Western Power Distribution is now National Grid Electricity Distribution (NGED), and SSE Power Distribution is now Scottish and Southern Electricity Networks (SSEN). Because of this, the old regional numbers can be confusing. Dialling 105 is now the simplest and fastest way to get the information you need, regardless of where you live in Great Britain.

Gas and electricity are supplied separately, even if you buy them from the same company. Always check both, as the previous occupants of your home might have used different suppliers for each fuel.

What happens when you switch?

Switching energy suppliers is much faster and simpler than it used to be. Thanks to recent industry upgrades, the entire process is now purely administrative and typically takes just five working days to complete.

Once you choose a new tariff and sign up, your new supplier handles all the background work. They will contact your old supplier to tell them you are leaving and arrange the exact date the switch will happen. You do not need to call your old supplier to cancel your contract—doing so can actually delay the process.

There is no physical work involved. Nobody needs to visit your home, and no pipes or wires are changed. The energy flowing into your property remains exactly the same; the only difference is which company sends you the bill at the end of the month. Your power will not be cut off at any point.

You will be asked to provide a final meter reading just before the switch completes. This ensures your old supplier can send an accurate final bill and your new supplier knows exactly where to start charging you. If you have a working smart meter, it will send this reading automatically.

Even though the switch happens in five days, you are still protected by a 14-day cooling-off period. If you change your mind within two weeks of signing up, you can cancel the switch without paying a penalty, and you will simply remain with your original supplier.