When can I switch energy suppliers without a penalty?

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When can I switch energy suppliers without a penalty?

Switching energy suppliers is pretty straightforward, but it’s not something that people in the UK do very regularly. According to an Ofgem report, nearly half of households have never switched or have only switched once.

But did you know that making a switch could save you hundreds of pounds a year because suppliers are more likely to offer bigger discounts to new customers?

There are numerous reasons why you should switch suppliers, but the most obvious is to save money, so there isn’t any point in making the change if your new deal is the same price as your current plan. You also have to consider what penalty or exit fees might need to be paid on top of this. The cost of such fees may cancel out the money you’d be saving on your new plan, making the exchange redundant.

If you want to switch but are worried about a hefty penalty fee, read on to find out how you can switch without paying the price.


How to switch without paying a penalty

When you sign up with an energy supplier, you’re usually tied into a contract that lasts either 12, 18 or 24 months. It’s a bit like a phone contract where, once you’re signed up, you’re tied in until it expires. Your energy contract works in the same way. When you start out, you’re generally on a fixed-term tariff. These plans are good as you pay a fixed amount per kWh of energy, even if energy prices increase. After the 12, 18 or 24 months are up, you’ll automatically be switched to a standard variable tariff.

Once your contract has ended and you’re on this standard plan, you have two options. You can switch suppliers for no fee or you can take out another fixed plan with the same supplier. If you do the latter, you’ll be tied in for a further number of months.

However, a penalty fee may be incurred if you wish to switch while you’re still on a fixed plan. Suppliers will usually have a set exit fee per fuel that must be paid if you want to leave. This can range from £5 per fuel to £30, depending on your supplier. This means that, if you wish to cancel your home or business gas and electricity, the penalty fee could be anywhere between £10 and £60.

If this is the case, you should wait until your fixed term ends, and then you’ll be able to switch penalty free.

Alternatively, there’s a 49-day window that many people aren’t aware of. Introduced by Ofgem, the window means that you can switch energy suppliers up to 49 days before your contract is due to end without paying any exit fees. This is usually the best time to swap providers.


Can you switch energy suppliers if you owe money?

You are able to switch suppliers if you’ve owed money for less than 28 days. Any outstanding money will be added to your final bill and will need to be paid. If you’ve owed money for more than 28 days, the amount owed will need to be paid before you can switch.

You can switch if you’re in debt because of an error made by the supplier. For example, if they’ve wrongly calculated your electricity usage and tried to charge you for it, this would not need to be paid upon leaving as you didn’t use that electricity.

If you’re in debt and are paying the money back via a prepayment meter, you can switch as long as you owe less than £500 on either fuel. The debt gets switched to the new supplier, and you continue to pay it back to them.


When is the best time to switch energy supplier?

The best time to switch energy supplier is when you don’t have to pay any exit fees (as previously discussed) and when you don’t owe the supplier anything.

It can also be a good idea to switch just before energy prices are due to rise or just before winter.

You should keep an eye on the Big Six. These are the biggest six energy companies in the UK and include British Gas and EDF Energy. When they start to increase their prices, other energy providers tend to do the same, so switch and tie in a fixed plan for a few months to save some money.


During winter, you’ll use more electricity and gas to light your home in the darker evenings and keep it warm. Therefore, if you want to pay less for your gas and electricity, early autumn could be the best time to make the swap. Energy providers may also have more offers available then.

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