The £200 charge for leav­ing your en­ergy firm

The Daily Telegraph - Your Money - - MONEY - Sam Mead­ows

House­holds are locked in by early exit fees on twice as many en­ergy tar­iffs as a year ago. The num­ber of deals that carry exit fees has in­creased to 43pc of the mar­ket, com­pared with 21pc last year.

The av­er­age fee is £63 but in the worst case Engie, a “green” sup­plier, charges a penalty of £200 – al­most 20pc of the av­er­age an­nual tar­iff. Sev­eral other firms charge £100.

The pro­por­tion of fixed-term deals on the mar­ket has also in­creased from 67pc to 71pc.

The de­vel­op­ment comes amid a cli­mate of ris­ing prices that has seen 43 in­creases in 2018 from 30 sup­pli­ers. Bri­tish Gas has raised prices twice, cost­ing its cus­tomers an ex­tra £104 a year, while Scot­tish Power has in­creased prices by £109, the most of the Big Six.

uSwitch, a com­par­i­son ser­vice, said the rises had been cou­pled with the re­moval of the cheap­est deals on the mar­ket. The cheap­est of­fer is now £921, against £815 this time last year.

Rik Smith from uSwitch said: “With whole­sale prices rocketing this year, sup­pli­ers – es­pe­cially smaller ones more sus­cep­ti­ble to volatile mar­ket con­di­tions – are look­ing at ways to guar­an­tee that cus­tomers will stay with them for the du­ra­tion of their tar­iff.”

Exit fees are charged on fixed-term deals, af­ter which most sup­pli­ers shift cus­tomers to a vari­able tar­iff. Providers can­not in­crease costs dur­ing a fixed-rate pe­riod.

Mar­tyn James of Re­solver, a com­plaints ser­vice, said: “Peo­ple are vaguely aware that when they sign up to a fixed rate they will be tied in for a time, but if you move house or want to switch sup­plier I’m not sure peo­ple re­alise how big these fees can be. The in­dus­try needs to be clearer over these costs.”

Engie’s Con­trol June 21 tar­iff costs an av­er­age of £1,133 a year, more than £100 higher than the cheap­est deal, and has an exit penalty of £200 for dual fuel. A spokesman said the tar­iff in­cluded a smart ther­mo­stat in­stalled free of charge and the exit fee was to stop cus­tomers leav­ing im­me­di­ately.

In other in­dus­tries the reg­u­la­tor has stepped in to cap exit fees. Ofgem, the en­ergy watch­dog, said that while there was no cap on fees it would not al­low charges that were “against its stan­dard of con­duct”.

A spokesman for En­ergy UK, a trade body, said exit fees were a com­mer­cial de­ci­sion for sup­pli­ers. He added: “Such deals are de­signed to pro­vide cer­tainty for both cus­tomers and sup­pli­ers, which is why they are of­ten the most com­pet­i­tively priced of­fers. Cus­tomers com­ing to the end of a fixed-term tar­iff will be no­ti­fied by their sup­plier and at that point they can switch with­out an exit fee.”

Al­most half the en­ergy tar­iffs on the mar­ket charge exit fees – twice as many as last year

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