Martin Lewis answers 'complicated' question on energy support
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
The consumer champion and his team at MoneySavingExpert.com is urging customers to check with their energy supplier about these costly penalties. According to recent research by the financial experts, some of the country’s largest energy suppliers have increased their early exit fees on their lowest priced deals. Mr Lewis’ team found that exit fees are 10 times more expensive than what they were in 2021.
For example, the typical exit fee on a fixed deal for a dual-fuel home was £60 this time last year.
However, the highest level seen by the experts in 2022 was £150, more than double the exit fee of 2021.
Currently, energy suppliers’ fixed deals have skyrocketing exit fees which detrimentally impacts consumers and their choices. MoneySavingExpert.com describes this as a “case of buyer beware”.
Once wholesale prices do drop and cheaper fixes become readily available, any potential gain households might acquire from switching could be wiped out entirely. Due to the exit fees being times higher, this could lead to an extra bill of £600.
As part of his research, Mr Lewis compared the exit fees for the country’s energy suppliers from this year and 2021.
It should be noted that some firms charge different fees depending on the length of the fix, with one-year fixes tending to have lower exit fees.
Additionally, some suppliers such as Octopus Energy and E.on do not charge their customers exit fees.
Bulb and Shell Energy do not currently have fixed rates, so are not featured in Martin Lewis’ analysis.
As it stands, a dual-fuel exit penalty for leaving a British Gas one-year fixed deal in June 2022 is £200. This time last year, it would either be nothing or £80.
Similarly for EDF Energy, the exit fee for leaving a two-year fixed rate deal is £300 whereas in 2021 it was £70 and nothing for a one-year fixed deal.
Martin Lewis, the founder of MoneySavingExpert.com, outlined why these exit fees are so “outrageous” and damaging to consumers.
Mr Lewis explained: “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 less 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.”
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip.
Source: Read Full Article