MoneySavingExpert’s Martin Lewis has shared a crucial tip for anyone who’s recently signed up for an energy contract. His latest advice focuses on how to avoid hefty exit fees when leaving an energy deal. The key, according to Martin, is to make sure you leave within 50 days of the start date of your contract.
In a clear video message, Martin explains that if you’re on a fixed tariff or thinking of signing up for one, there’s a simple way to dodge those dreaded early exit fees. He said, “They cannot charge you early exit fees if you leave a fix within the last 50 days. So from day 49 onwards, no early exit penalties. You’re absolutely free to leave if you choose to”, reported the Daily Record.
Martin goes on to stress the importance of managing contract end dates: “It’s a very good idea to work out when your fix ends and put 50 days beforehand in your diary to do a comparison to see if you can then find anything cheaper. If you can, you’re free to switch and they can’t lock you in with penalties. If you can’t, stay where you are and milk it out till the last moment.”
This advice comes at a time when Ofgem is set to increase the price cap for energy in April, meaning households are about to face higher bills. The new cap will result in a 6.4% rise in energy costs, pushing the average dual fuel bill for those paying by direct debit up by £111 per year to £1,849, which is an extra £9.25 a month, reports the Mirror.
But, despite its name, the Ofgem price cap doesn’t limit the total amount you’ll pay for energy. Instead, it sets a maximum price for the unit of gas and electricity you use, along with the highest daily standing charge — which covers the cost of grid connection. Your final bill still depends on how much energy you use, so it could be higher or lower than the average amount mentioned.
The new price cap, which will be reviewed every quarter, will stay in place until June 30, with the next assessment expected then. For those using pre-payment meters, the cap will rise from £1,690 to £1,803, while for those who pay upon receipt of their bills, it will go up from £1,851 to £1,969.
With energy prices set to rise, Martin’s advice on avoiding exit fees is more relevant than ever, giving households a chance to lock in better deals before the April hike.
