Contract renewal

philjnall

My fixed energy deal with Scottish Power ends on the 30th June. They have offered me a new deal on their flexi tariff either for one or two years however with an exit fee of £150 per energy. This seems exorbitant to me - has anyone any views on this? Thanks

The_Fat_Controller

EDF's offering to me, their May24 fix also has the same exit fees.

You say your offer is a "flexi" and not a fix, so what is on offer ?

Providers do not have exit fees on the Standard Variable tariffs.

Edit : I found their tariff, it's a hybrid with fixed and variable elements and for me would be twice as expensive as the fix offered by EDF !

The unit rates are very high !

wild666

Maybe they suspect that within 24 months that the price of electric and gas will be much lower than it is now and they put such high cancellation fees in place to deter people who sign up to such a deal from leaving early if prices drop considerably.
£150 cancellation on each utility would be over  550 kWh of electric and 2075 kWh of gas with my supplier.

QrizB

philjnall said:

... for one or two years however with an exit fee of £150 per energy. This seems exorbitant to me - has anyone any views on this?

£150 per fuel is not an unusual exit fee in the current market.

Energy - gas and electricity - is expensive at the moment. In order to offer a fixed contract, a responsible supplier will buy energy ahead of time to cover your likely consumption. (It was failing to do this, in the hope that they could by cheap energy on the short-term markets instead, that saw so many suppliers go bust last autumn.)

If prices fall and you then switch away, they will still have this expensive energy and there's a chance they will not be able to sell it for as much as they paid for it.

The exit fee is to dissuade you from switching, and to help cover their costs if you do.

Mstty

If you believe the prediction specialists like cornwall insights they suggest a rise this October '22 then a fall Apr '23 but the Apr '23 fall will only bring us back to the current price cap levels.

Mstty

@philjnall

Nobody can really comment if you don't provide your actual kWh usage for the year and the standing charges and kWh price in pence if the deals being offered.

Ultrasonic

philjnall said:

My fixed energy deal with Scottish Power ends on the 30th June. They have offered me a new deal on their flexi tariff either for one or two years however with an exit fee of £150 per energy. This seems exorbitant to me - has anyone any views on this? Thanks

The exit fees only matter if you choose to leave but what is far more likely exorbitant and an issue are the actual costs for energy on that tariff. In your position I would revert to Scottish Power's standard variable rate, or look at fixed tariffs with other energy suppliers as you'll likely find cheaper alternatives. Note that to make meaningful comparisons you really need to have an idea of your typical annual energy use for each fuel in kWh (or day and night if on E7).