Switching Energy Suppliers Safely: How the Price Cap and Exit Fees Work

The **Ofgem Price Cap** sets the absolute maximum price that energy suppliers can charge you per unit of gas and electricity, as well as the daily standing charge. It is updated every three months to reflect wholesale market changes.

It is vital to understand that the price cap is not a limit on your total annual bill. If you use more energy, you will pay more. The cap applies automatically to all standard variable tariffs (the default rate you are put on if you don't choose a specific fixed deal). If you are looking to switch suppliers, the cap serves as your benchmark to judge whether a new offer is actually a good deal.

When comparing deals, you will generally choose between two types of contracts:

• **Standard Variable Tariffs (SVT):** These rates fluctuate in line with the Ofgem price cap. There are no contract lengths and no exit fees, meaning you can switch to another deal at any time.
• **Fixed Tariffs:** These lock in your unit rates and standing charges for a set period (usually 12 or 24 months). This protects you if energy prices spike, but means you won't benefit if market prices suddenly fall below your locked rate.

If you sign up for a fixed tariff and want to break the contract early to switch to a cheaper supplier, your current provider will likely charge you an **early exit fee**. These fees typically range from £25 to £75 per fuel type (gas and electricity separately).

However, you can legally bypass these fees using the **Ofgem 49-Day Rule**. Energy companies are legally blocked from charging exit fees if you switch suppliers within the final 49 days of your fixed-term contract. This is known as your switching window, and your supplier must notify you when it opens.

Falling into arrears does not completely block you from switching, but strict rules apply depending on how long you have owed the money:

• **Debt under 28 days old:** You can switch suppliers freely. Your old supplier will bundle any outstanding balances into a final bill, which you must clear.
• **Debt over 28 days old:** Your supplier can legally block the switch until you pay off the balance.
• **Prepayment Meter Exception:** If you pay via a prepayment meter and owe £500 or less per fuel (£1,000 total for dual fuel), you can switch under the **Debt Assignment Regime**. Your new supplier will take on the debt, and you will continue paying it off through your new meter.