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energy companies

How to avoid paying an exit fee when you switch energy tariffs

Compare gas and electricity suppliers and you’ll find that many charge an exit fee if you want to switch. But you don’t always have to pay an exit fee – we can tell you how to avoid it. Our research found that up to one in ten energy customers who haven’t switched energy supplier say they can’t do so because they have a fixed contract.

These contracts often charge a termination fee to leave before the end of the deal. But choose and act carefully, and you can avoid paying an exit fee altogether. We’ve found that several of the cheapest gas and electricity deals from small companies have no exit fees.

Plus, towards the end of your fixed tariff, suppliers can’t charge you a fee if you want to leave. Below, we reveal the cheapest energy deals with no exit fees.

To find the best energy deal for you straight away, use Which? Switch to compare gas and electricity prices[1].

Or you can phone us on 0800 410 1149 or 01259 220235.

Five things you should know about exit fees

If you’re signed up to a fixed-term tariff and want to get out of it before the end of the contract, you’ll often have to pay. But don’t let you put this off; check how much you could save by switching, and subtract the exit fee to see if you’d still be better off.

  • Exit fees vary from ?5 to ?30 per fuel. So you could face a ?60 fee to switch for a dual-fuel deal.
  • Some suppliers may waive the exit fee if you switch to another of its tariffs.

    Ask your supplier if it will do this to keep you as a customer.

  • If you’re moving home, you should be able to avoid exit fees – as long as you keep your tariff and only change the address.
  • Your supplier cannot charge you an exit fee in the last 49 days of your tariff; read on to find out more about this.
  • Not all fixed tariffs have exit fees attached. This leaves you free to pick a cheap deal and switch again if you spot a better one elsewhere.

Cheapest gas and electricity tariffs with no exit fee

We scoured the market to find the cheapest energy deals without exit fees attached; perfect if you want the flexibility to switch again. Here we’ve listed the top three gas and electricity tariffs, which are available to all energy customers in England, Scotland and Wales.

We’ve also calculated how much these tariffs would save the average household in a year, compared with Npower[2]‘s standard tariff (the priciest Big Six variable deal) and British Gas[3]‘s standard tariff (the cheapest Big Six variable deal).

  1. Usio Energy Supply[4] Smart Home after 7pm 0.2 – Paperless (?837). ?329 cheaper than Npower. ?264 cheaper than British Gas. Usio Energy’s ‘Green’ and ‘Lifestyle variable’ tariffs are up to ?5 pricier than this.
  2. Bulb[5] Vari-Fair – Paperless (?856). ?311 cheaper than Npower. ?247 cheaper than British Gas.
  3. Iresa[6] Flex5 12 month Fixed Direct Debit – Paperless (?860). ?306 cheaper than Npower. ?241 cheaper than British Gas.

If you live in north Wales, north-west England or Yorkshire, there’s a cheaper tariff from Eversmart Energy (?796). Breeze Energy is also selling a dual-fuel tariff (?834) but it’s not available to those who live in north Scotland.

Happy to be tied in for a year to save even more? Check the top five cheapest energy deals[7] to see you much you could save.

When can’t your energy supplier charge you an exit fee?

When you’re in the last 42-49 days of a fixed energy tariff, you do not have to pay a fee to switch. In this time, your energy supplier should send you a letter telling you that your gas and electricity tariff is expiring.

It will set out the cheapest deal for you and what will happen if you don’t sign up to a new tariff. Usually this will mean that you will roll automatically onto its standard variable tariff (often pricier). Remember that the cheapest deal your supplier tells you about is its cheapest tariff; you might save more on your bills by choosing a tariff with another supplier.

If you are on a standard variable energy tariff (an out-of-contract tariff), it has no end date and no exit fees. So you can move to a new energy deal any time. Find out how to get the best energy deal[8].

Our energy pricing research

Our data is from Energylinx.

Prices are based on a dual-fuel tariff available in all regions for a medium user (using the Ofgem averages of 3,100kWh electricity and 12,000kWh gas per year), paying by monthly direct debit, with paperless bills, and are averaged across all regions. Exact prices can vary according to region, usage and payment method. Prices are rounded to the nearest whole pound.The prices given above are correct on 6 November 2017.

*Survey of 4,773 members of the general public who haven’t switched energy supplier, October 2016.

References

  1. ^ compare gas and electricity prices (switch.which.co.uk)
  2. ^ Npower (www.which.co.uk)
  3. ^ British Gas (www.which.co.uk)
  4. ^ Usio Energy Supply (www.which.co.uk)
  5. ^ Bulb (www.which.co.uk)
  6. ^ Iresa (www.which.co.uk)
  7. ^ top five cheapest energy deals (www.which.co.uk)
  8. ^ best energy deal (www.which.co.uk)

We know if you’re paying too much for energy

Your age and where you live in the UK determine how likely you are to have switched energy supplier or moved gas and electricity tariff, exclusive Which? research reveals. Take our quiz to find out if you’re capable of beating the energy rip-off. Common energy deal pitfalls that can result in you paying more than you need to for gas and electricity include how often you switch energy supplier, or how long you stay on the same gas and electricity deal.

And how you pay can also have an impact on the price. We’ve created a quiz that will tell you whether or not you’re paying too much for energy (spoiler: you probably are). It will also tell you what you can do to save money on your energy bills as the temperatures drop.

Which? energy rip-off quiz

Can’t see the quiz?

Go to beat the energy rip-off[1].

Whether you’re paying too much depends on your age and where you live

More than a third (34%) of those aged 18-24 have always been a customer of their current gas and electricity supplier – perhaps unsurprisingly, since they’re the newest customers who’ve had the shortest opportunity to switch.

Least likely to have switched energy supplier: 18-24s

Overall, a quarter (25%) of adults have not actively switched energy firm. If you live in Northern Ireland, you’re almost as likely to have always been a customer of the same energy company: 33% of you told us that’s the case. If you’re aged 65 or over, the majority (55%) of you have been with the same energy company for at least five years.

Most likely to have been with the same energy company for more than five years: 65+

Less than half (47%) of adults of any age have been with their supplier longer than five years.

Just 25% of those aged between 34 and 45 have been with their current energy firm this long.

Who’s the least likely to have changed tariff?

More than seven in ten (72%) energy customers in Northern Ireland say they have never changed their tariff or deal while with their current company. Although there is less choice in Northern Ireland than in England, Scotland and Wales, not comparing tariffs means you risk missing out on the best deals. By age, 45-54s are the most guilty of staying on the same tariff.

Nearly half (48%) admit they’ve not changed their tariff, compared with the overall average of 42%.

Have you changed the way you pay your energy bill?

Changing payment method isn’t particularly common. Paying by direct debit is usually cheapest, so there’s no need to change if you do this. But if you pay when you receive each bill, you’ll often be paying more, according to our research.

Least likely to have changed payment method: 55+

If you’re aged over 55, check how you pay.

You’re the least likely not to have changed your payment method – 80% of 55-64s and 82% of those aged 65+ told us this. So this age group is most likely to still be paying by pricey standard credit.

How to save money on energy

Follow our simple tips to save cash over the winter:

  • Switch energy supplier[2] to save up to ?346. That’s comparing the priciest Big Six standard tariff (Npower[3]) with the cheapest deal available.
  • Program your heating[4] to come on only at times when you need it (and off when you don’t – during the night, for example).

    Consider setting it to switch off 20 minutes before you usually go out, as there will still be residual heat in your home.

  • Turn down radiators in rarely used or empty rooms and shut the door so you’re not heating areas you don’t need to. Plus, follow other money-saving heating controls tips[5].
  • Replace your light bulbs with energy-saving LED bulbs[6]. An LED bulb costs around ?1.71 per year to run and could cut ?180 from your energy bills over its lifetime, compared with old-style bulbs.
  • Draught-proof[7] your house to help keep warm air in and cold air out.

    Much of it you can do yourself, saving up to ?50 on your bills in a year and making your home more comfortable.

Our energy research

Based on an online survey of 8,851 UK adults in September and October 2016. Savings figures based on the difference between the priciest standard tariff from a Big Six energy company (Npower) and the cheapest deal on the market, correct on 31 October 2017. Pricing data is from Energylinx, based on a medium user (using Ofgem averages of 3,100kWh electricity and 12,000kWh gas per year), paying by monthly direct debit, and with paperless bills.

Prices are averages across England, Scotland and Wales.

References

  1. ^ beat the energy rip-off (www.which.co.uk)
  2. ^ Switch energy supplier (switch.which.co.uk)
  3. ^ Npower (www.which.co.uk)
  4. ^ Program your heating (www.which.co.uk)
  5. ^ money-saving heating controls tips (www.which.co.uk)
  6. ^ LED bulbs (www.which.co.uk)
  7. ^ Draught-proof (www.which.co.uk)

Npower and SSE plan merger into new energy company

Energy companies Npower and SSE are in talks about joining together to create a new gas and electricity supplier. But neither supplier is rated highly by its customers. Could the merge help them improve?

SSE is the second-biggest energy supplier in Great Britain. Around 7.77 million households are its customers, while Npower serves 4.8 million households. If they joined together, the new company could become the electricity supplier with the biggest market share, overtaking British Gas.

But our survey has shown that these companies aren’t viewed particularly favourably by their customers. Read on to find out more about how Npower and SSE compare, their customer ratings, and how you might be affected if you’re one of their customers.

Npower or SSE customer? Compare gas and electricity prices[1] to find the best deal for you using our independent energy switching service, Which? Switch.

SSE and Npower compared

In August Npower[2]‘s owner, Innogy, said that it would have a financial loss this year.

Meanwhile, SSE[3] revealed in July that it had lost 230,000 customers over the past year. Both energy firms raised their prices earlier this year – along with the rest of the Big Six – but Npower’s price rise was the greatest. Its standard tariff is currently the priciest among the Big Six firms, costing ?1,166 per year for the average user.

The cheapest deal available across England, Scotland and Wales is currently Economy Energy’s Online Saver, costing ?830 a year for the average household. SSE currently has 14% electricity market share, compared with Npower’s 10%, according to energy regulator Ofgem’s figures. They both also supply 11% of the household gas market.

Combined, this could see the new company have 24% electricity market share – bigger than British Gas[4]‘s 22% – and 22% gas market share (still short of British Gas’s 33% gas market share).

The best and worst energy firms

Npower was rated the worst energy supplier in our most recent survey of more than 8,000 energy customers in the UK. Its overall customer score of 44% fell far short of top-scoring small supplier Ovo Energy[5]‘s 78%. Npower was also the only energy supplier to score one star for helping customers to save energy, when we asked its customers to rate it.

SSE scores better, but still not highly. See our full energy satisfaction survey results[6] to find how it fares alongside 23 other gas and electricity firms.

What does this mean for Npower and SSE customers?

SSE’s talks with Npower’s parent company, German firm Innogy, ‘are well advanced but no final decisions have been taken’, according to SSE. At this stage, it’s therefore too early to say what this would mean for customers of the two companies, or the price of their energy deals.

SSE said: ‘In line with its stated commitment to embrace change in each of its businesses, adapting them to the political, economic, social and technological requirements of customers and of society as a whole, the board of SSE has been in discussions with Innogy about creating a new independent energy supply company.’ It added that it will ‘disclose the outcome of the discussions as soon as they are concluded’. This follows closely behind SSE’s announcement[7] that it would stop automatically putting customers onto variable tariffs that are the most expensive at the end of their fixed deals, from early next financial year.

Instead, it will put customers onto an equivalent cheaper fixed-term deal.

Besides SSE, British Gas, Eon and Scottish Power have also all committed to moving customers off their more expensive standard tariffs.

References

  1. ^ Compare gas and electricity prices (switch.which.co.uk)
  2. ^ Npower (www.which.co.uk)
  3. ^ SSE (www.which.co.uk)
  4. ^ British Gas (www.which.co.uk)
  5. ^ Ovo Energy (www.which.co.uk)
  6. ^ full energy satisfaction survey results (www.which.co.uk)
  7. ^ SSE’s announcement (www.which.co.uk)