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Martin Lewis issues urgent warning over ‘outrageous’ early exit energy fees

MARTIN Lewis has slammed energy firms for charging customers "outrageous" exit fees from fixed tariffs. 

Suppliers charge up to £600 to leave fixed deals, up from £60 a year ago.  

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The MoneySavingExpert founder branded the charges - which are up to 10 times higher than last year - as the “final nail in the coffin of dying energy competition.” 

Energy firm Outfox the Market currently charges £600 to leave its one-year fixed deal, up from a maximum of £67 in June 2021. 

While EDF and Scottish Power charge £300 to leave their two-year fixed deals, up from £70 and £60 respectively. 

Martin Lewis said: "These massive, outrageous early exit fees are the final nail in the coffin of dying energy competition. 


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“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.”

Many households are looking at locking into fixed deals to mitigate against future energy rises, as the price cap is expected to go up to £3,000 a year in October. 

However, if prices do start to fall and cheaper deals become available then they wouldn’t be able to save by exiting fixed deals. 

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Firms charge different exit fees based on the length of the deal. 

Some energy companies - such as Octopus Energy and E.on - don’t charge fees. 

Energy firms are allowed to charge exit fees on fixed term contracts - but they must be “proportionate”, according to Ofgem rules. 

They also do not have to publish deals which are offered to existing customers. 

Mr Lewis said that a “lack of transparency and visibility” makes it easier for firms to charge high exit fees. 

He added: “It’s a pig’s ear and the regulator needs to intervene to change things."

You can avoid an exit fee if you switch away within the last 49 days of a fixed-term contract.

Consumer expert Martyn James said: "It's absolutely unforgivable to charge people these jaw-dropping fees for leaving contracts early.

“This is another example of poor service from the energy sector at the worst possible time for people trying to make ends meet.”

Some energy firms, including British Gas, do not charge fees for existing customers to switch to new deals. 

A Scottish Power spokesperson said: "These are extraordinary times for the energy retail market and every energy supplier is having to make changes to reflect the current market conditions, which are extremely volatile.

"This includes revising tariffs and exit fees to ensure they cover the higher cost of buying energy in advance for our customers and protecting us as a business should customers choose to leave the tariff."

An EDF spokesperson said: "The level of our exit fees is higher because the cost of energy and volatility in the market is much greater than it was a year ago.

"To be able to offer fixed tariffs, EDF has to buy the energy for the full length of the tariff, so if prices fall and a customer switches away we incur significant losses.

"This is why exit fees are included on our tariffs, even though they’d only cover a portion of our losses."

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An Ofgem spokesperson said its "top priority" is to protect consumers.

They said "We fully expect suppliers to make sure charges are fair and equitable and rules are clear that termination fees are allowed but should be proportionate. "

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