If you are someone who likes certainty, then it is quite likely you are currently on a fixed energy tariff. These are a great way to give you some peace of mind that the unit rates and standing charges you will pay won’t change for 1, 2 or even 3 years.
Things can change however over those periods of time and it may mean you want to leave your fixed tariff early. It may also be that your fixed tariff is coming to an end and you don’t want to leave it to the last minute to switch.
Here we’ll look at when you can leave your energy tariff for free, why you might have to pay and how much it might cost you.
What are fixed energy tariffs?
Just in case you aren’t sure, a fixed energy tariff means that the rate you pay for your gas and electricity remains constant for a set period, typically ranging from one to three years.
This type of tariff can offer peace of mind, as your energy prices won’t fluctuate with market changes. However, the trade-off is less flexibility, especially when it comes to leaving the tariff before the end date.
Can I leave my fixed tariff for free?
Yes, there are a few times when you can leave your fixed-rate energy tariff for free and avoid any exit fees. These are:
- If you are within 49 days of the tariff end date: Something that is not well known, you can actually switch up to 49 days before your fixed tariffs without having to pay any exit fees. This grace period is a standard feature across UK energy suppliers, following Ofgem’s regulations.
If you would like to work out what date is 49 days before your fixed rate tariff ends, then try our handy 49-day rule calculator. All you need to know is your tariff end date.
- Price increase or tariff changes: If your energy supplier raises their prices or makes significant changes to your tariff terms, they must give you 30-days notice. During this period, you can choose to switch without facing an early exit fee.
- Moving home: If you’re relocating, some suppliers will allow you to either transfer your tariff to the new property or exit the tariff without a fee. However, this can vary, so it’s essential to check your contract or speak to your supplier before moving.
Do I have to pay to leave a fixed energy tariff?
Early exit fees are the reason you may have to pay to leave. Most energy suppliers include this fee in their contract terms to discourage customers from leaving before the tariff end date. It is the main disadvantage of opting for a fixed tariff over a variable tariff.
This fee varies depending on your energy provider and the specifics of your tariff but can range significantly, some suppliers may charge £75, and others may charge £300. These fees are normally per fuel as well, so if both your gas and electricity are fixed and you want to leave early, you will need to pay two of these fees.
The rationale behind this charge is to compensate the supplier for the potential loss of revenue and administrative costs incurred by you leaving early.
Should I pay an exit fee to leave?
Deciding to leave a fixed tariff early should involve careful consideration. You need to make sure you compare the early exit fee against potential savings from a new, cheaper tariff. Sometimes, the savings might outweigh the penalty, making an early switch financially sensible.
If you would like to find out more about how to switch suppliers, then we have a guide for you.