5 things you should know about energy cancellation fees
Paying an early exit fee for switching energy suppliers is a nuisance but it can easily be avoided
1. Avoiding a cancellation fee
Although most consumers tend to go for the cheapest gas and electricity deals, it always helps a little more when you do not have to pay a cancellation fee to switch from your old supplier to your new one.
The best way to avoid paying a cancellation fee (also known as an early termination charge or early exit fee), is to switch your supplier when you are “out of contract”. Being out of contract with your supplier simply means that the minimum contract period has elapsed, and you are free to change suppliers without having to pay an expensive fee to do so.
2. How cancellation fees work
Cancellation fees, can range from €25 - €75. Energy suppliers include cancellation fees in their contract with the aim of preventing consumers moving to another supplier. That means that if you select a 12-month gas, electricity or dual fuel tariff with a cancellation fee and then decide to switch six months in, you will have to pay your supplier an exit fee.
There are circumstances in which some suppliers waive cancellation fees. Depending on your supplier, you may not be liable to pay fees if you are moving house, for example.
3. Which types of plans have cancellation fees?
Early termination charges apply to the vast majority of gas, electricity and dual fuel tariffs. Electric Ireland, Bord Gáis Energy, and Energia all charge €50 if a customer terminates their contract early. SEE Airtricity apply a €25 and €50 cancellation fee depending on the tariff you sign up to. Pay-as-you-go energy supplier, PrePayPower charges €50 while its rival Pinergy charges €75 if the agreement is terminated within the minimum period.
4. Minimum contract periods
The minimum contract period for a typical gas, electricity or dual fuel plan is for a period of 12 months. Some suppliers offer 24 month contracts also and its important that customers are fully aware of the duration of the energy tariff that they plan on switching to.
5. Discount end dates
Introductory discount offers usually expire after either 12 or 24 months, after which point suppliers will switch customers over to their more expensive standard tariffs. Energy suppliers will not inform you that your discount has ended. By taking note of your introductory offer discount end date, you’ll be able to plan ahead to switch and save again when the time is right.