Dilemma re: Fixing with high exit fee vs Fixing with no exit fee

JJforever

Hi All

Just have a bit of a dilemma and just wondering what people's opinions were.

I just missed out on the deal Martin put together with EON next fixed 16M.  I checked the figures yesterday and realised it would have saved me a bit of money.  So I have re-done the figures and it would still save me some money just not as much and has an exit fee.  I'm also looking at another deal from Octopus although it is a bit more expensive, although it  has no exit fee.  

Would you think it better to go for a deal that is less expensive but with a high exit fee or one that is more expensive with no exit fee?

Would appreciate any thoughts and my thanks in advance.

QrizB

How long would you need to be on the cheaper deal before you had saved the cost of the exit fee?

And how likely do you think it is that you'll want to switch away before completing the term?

victor2

As @QrizB says, look at how long it would take to recover the exit fee to put you in a position where you could switch away effectively without loss.

Personally, having (like most others) abandoned fixes when the price cap made variable tariffs more attractive financially, I went back to a fix with Octopus last May. There was a little flurry of quite good fixes coming out then, and this one had no exit fee - and was fixed for 15 months. Even before it started, Octopus introduced a new version with a slightly lower annual cost for my usage. I emailed them and they moved it to the new tariff. This happened again before the start date. Overall, I reduced my forecasted annual cost by £70 with the two switches.

Nothing from the big suppliers can significantly beat it now, so I'll probably stick with it to the end, but I have the knowledge that it will cost me nothing to move away if somnething better comes along.

molerat

Crystal Ball ?

https://uk.finance.yahoo.com/news/oil-crisis-fuelled-russia-war-150024593.html

But as markets have reduced to a simmer, oil executives have warned that profits are also going off the boil. A glut of new oil and gas projects, stoked by a pro-fossil-fuel agenda from the White House, could mean weaker markets in the future too.

the surge in new oil and LNG projects will outstrip demand from this year, leading to lower market prices for the rest of the decade.

Ildhund

Then again ...

UK Gas decreased 0.95 GBp/Thm or 0.76% since the beginning of 2025, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. UK Natural Gas is expected to trade at 130.82 GBp/Thm by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 147.58 in 12 months time.

UK Natural Gas - Price - Chart - Historical Data - News

Chrysalis

Its basically savings vs exit fee.  If you recover it in a few months, its probably ok, but the longer predicted savings are, and especially if they less than the exit fee for the entire duration of the fix, then it becomes less enticing.
The value of no exit fee is the agility to take action if the market becomes more favourable.

bristolleedsfan

 EON Next exit fee only applies if change supplier,

stripling

Ildhund said:

Then again ...

UK Gas decreased 0.95 GBp/Thm or 0.76% since the beginning of 2025, according to trading on a contract for difference (CFD) that tracks the benchmark market for this commodity. UK Natural Gas is expected to trade at 130.82 GBp/Thm by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate it to trade at 147.58 in 12 months time.

UK Natural Gas - Price - Chart - Historical Data - News

That's not quite how our consumer prices are sourced. The UK trades its gas on the international markets so sells as well as buys and gas for UK consumers may also have been bought on the European market (over 60-75%) - the Dutch TTF. I tried to explain a little of this previously on the energy news thread (it's indirectly part of my job).  

There's both spot prices and forward delivery prices - the latter is a long way ahead - which is how energy companies manage risk for their consumer prices - hedging ensures that the risks in price volatility are smoothed out a bit. That's why so many of the 'new' energy companies went under previously - they didn't have the capital to hedge. 

Trading Economics is helpful for past data and fun to explore but it is a US website and some of its written commentary on the UK is a wee bit odd. 
Second guessing is really hard from a consumer perspective (when/if to fix etc.,) even the serious traders I watch are debating madly (as in more than normal debating 😁) on where markets are going this year (partly because so many things have an impact on prices and we're in quite strange times right now)... 

I think the advice offered elsewhere in this thread about weighing up how long a fix would enable saving up the exit fee is one way to evaluate it but sometimes fixing is just plain good for peace of mind. You know where you are. And maybe that's worth an extra £50 or whatever in the unlikely (imo) scenario that consumer prices plunge? 
Dunno... it's a hard decision to make if your finances are tight. Consumers shouldn't be subject to this nonsense but that would require a massive rip down and repair of our energy market plus a regulator that actually did his job.  The piggies are preparing for take off as I speak.