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As households around the country assess if their current deal is the best for their circumstances we publish guidelines on avoiding exit fees if you have recently been informed by your energy provider that your prices are to rise.
Most customers who have recently switched to one of the highly competitive ‘variable rate' tariffs have accepted, as part of the deal, penalty fees which they are liable for if they move firms during the contract period. Normally around £60 on a dual fuel deal these fees can often be avoided if you decide to leave your provider at the time of price increase. This is because Ofgem has ruled that if you as a customer are being asked to accept any terms or conditions that are worse than those you are currently on you should have the opportunity to turn down that deal and move supplier without penalty.
Technically this may mean that if the wording of your deal is a ‘x% lower than a companies a standard rate' rather than a specified unit cost you would not qualify for the fee free cancellation – but all companies who have recently announced price increases have already said they will allow any customers on any variable tariff to move without penalty (we update this article companies make their intentions known).
You must however get in touch with your energy company before they implement any increase to qualify. The key dates therefore for the power companies who have announced increases are as follows:
Scottish Power, British Gas, Scottish and Southern and E.on – Increases now implemented so the window of opportunity has now closed
NPower – 1st October 2011
EDF – As yet no increases have been announced – EDF were the last company to increase prices during the previous round of price increases earlier this year.
If you wish to change supplier, and want to avoid any exit fee you need to let your supplier know before this date. Remember this only applies to those who face a price increase so anyone on a fixed tariff, or a tariff where prices have not been increased will not be eligible.
Ofgem have advised that any customer on a standard variable term deal with an early termination fee will not have to pay a termination fee if they notify their current supplier of their intention to switch on or before the day the change takes place. The specific ‘rule' to quote if you feel you are being fobbed off is ‘Supply Licence Condition 23 (SLC 23)'
What to do next?
If you are concerned over further price rises in the future consider a fixed rate – there are still a few competitive fixed deals in the market – which may still be cheaper than the prices now being charged by companies who have increased charges. Obviously with only the three companies above having announced price increases moving to another variable tariff with another supplier could mean you are faced with a increase from that company in the near future.
Run a quotation using the MoneyMaxim price comparison service – our service is totally impartial and independent, and accredited by Consumer Focus.
Moving to a fixed rate deal means the unit cost or your gas or electricity is fixed for until the expiry of the deal, which a capped deal means prices can only rise to a defined unit cost before its expiry.