Beware energy discounts that lock you inSome discounts make tariffs expensive to leave
15 February 2012
New Which? research has uncovered a number of energy tariffs that lure you in with a discount, but could cost you more if you leave early.
Discounts offered by both Npower and Eon are being used to lock consumers in to certain tariffs and make switching expensive, in some cases having to pay almost £100 just to leave a tariff.
Npower's direct debit discount
Npower currently offers an 'up to £100 annual direct debit discount' on its energy tariffs and, if you're a new customer, this discount is automatically deducted from your monthly direct debits.
However, the money is only credited to your account in the 12th month of your deal. This means you're effectively building up a deficit, which you'll be forced to repay if you decide to switch suppliers during the year.
You'd have to pay nearly £100 if wanted to leave your tariff after 11 months, as your account wouldn’t have been credited with the discount.
And to add insult to injury, official exit penalties may be added to your final bill, depending on the tariff you're on.
Eon's Energy Fit plan
Eon's Energy Fit plan, ties you in with the promise of two months' worth of free energy over two years, which means you make no direct debit payments in month 12 and 24.
However, if Eon put up its prices over the next year, you wouldn't be able to leave the supplier without forfeiting your month of free energy (on average about £100).
If you stayed, you'd end up paying more than you anticipated when you signed up.
No get-out clause
While energy providers must waive standard exit fees if you decide to switch as a result of a rise in gas and electricity prices, this doesn’t apply to discounts that are 'held back' until a certain point in
If you leave early, you won’t get a penny – meaning these discounts are exit fees in all but name.
Npower told us that it incorporates its annual discount into monthly direct debits because this is what consumers have told it they want, while Eon said that if you switch from the Energy Fit Plan to another Eon tariff, you'll still receive a percentage of the free month of energy.
The Big Switch
People who want a cheaper deal on their energy bills can join The Big Switch - a new collective switching campaign launched by Which? and online campaigners 38 Degrees.
It's the first time in the UK that so many people - currently over 85,000 - will join together for a cheaper deal. Which? is aiming to negotiate a deal with energy companies on behalf of those who have joined.
Consumers have until 31 March to sign up at www.whichbigswitch.co.uk.
- Join thousands of others to cut energy bills with The Big Switch
- Find out how we are campaigning for simpler tariffs
- Read our guide - energy tariffs explained