Martin Lewis has slammed energy companies after they began charging customers hundreds of pounds in exit fees. The Money Saving Expert founder claims that it cost less than £60 just one year ago.
The consumer champion is now encouraging households to check about cost penalties with their energy supplier. According to research by Martin and his team, some of the country’s largest energy suppliers have increased their early exit fees on their lowest priced deals - some of which are 10 times more expensive than they were in 2021.
The average exit fee this time last year was £60 on a dual-fuel home. Martin Lewis also compared the exit fees for the country’s energy suppliers from this year and 2021, reports the Express.
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Some firms charge different fees depending on the length of the fix, with one-year fixes tending to have lower exit fees. Some suppliers such as Octopus Energy and E.on do not charge their customers exit fees and Bulb and Shell Energy do not currently have fixed rates, so are not featured in the analysis.
The dual-fuel exit penalty for leaving a British Gas one-year fixed deal in June 2022 is £200 - whereas this time last year, it would either be no charge or £80. The exit fee for leaving a two-year fixed rate deal with EDF Energy is £300 whereas in 2021 it was £70 and nothing for a one-year fixed deal.
Mr Lewis said: “These massive, outrageous early exit fees are the final nail in the coffin of dying energy competition. Many people are trying to decide whether to fix or not at the moment. That no longer means going cheaper, it’s about whether you should pay more now, to forestall the huge rise likely coming in October.”
However, the financial expert noted how the collapse of the energy market means there are fewer options for consumers to pick from. He added: “Yet, the difficulty of making that decision is compounded by the fact that you can no longer use a comparison site.
“The only deals out there worth considering are existing customer deals, and the rules say providers don’t have to publish them – they can offer them to individuals. This means there’s far less help available for people making those decisions (at MSE we try and compile the tariffs, but we rely on consumers reporting them to us).
“The lack of transparency and visibility makes it easier for firms to add on these hideous early exit penalties if you leave before the fix ends. Altogether, that just ramps up the consequence of the decision of whether to fix or not, because with these tariffs you can no longer escape easily if you later think you’ve made the wrong call. It’s a pig’s ear and the regulator needs to intervene to change things.”
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