Penalty cuffs are off capped deals as energy prices tumble

Customers on capped tariffs should act now with savings of over £200 to be made says moneysupermarket.com.

With all but one of the major suppliers having removed penalty charges, customers could save over £200 a year by moving away from a capped tariff.

Capped rate tariffs were introduced to offer customers the financial security of knowing their energy costs would not rise above a set level. But as domestic gas and electricity prices have begun to fall, suppliers have removed early exit penalty charges of up to £45 from most deals. This means most customers are now able to freely shop around for a better deal and take advantage of new tariffs on the market.

Paul Schofield, head of utilities at moneysupermarket.com, said: “We want to remind capped tariff customers that now energy prices have started to fall, there are plenty of deals to take advantage of.

“Most capped tariffs no longer carry a penalty charge and therefore there is no reason for customers to continue to pay over the odds for their energy. These charges will have been viewed by many customers as penalty cuffs preventing them from swapping to a cheaper deal.

“Only British Gas' ‘Price Protection 2010’ tariff has a penalty charge for early termination and the amount varies between £20 and £45, depending on the time remaining on the deal. Customers on this tariff are paying an average bill of £766.97 a year, which is only £11.63 higher than the cheapest product on the market. While this deal from September 2005 remains competitive, in this era of tumbling gas and electricity prices, I’d encourage all customers to assess their current situation.”

moneysupermarket.com is helping people ditch their expensive power companies and get the cheapest energy deal by offering £30 cash-back to all customers swapping to a dual fuel tariff through its service. Those not going for a dual fuel tariff but changing a provider or tariff will benefit from a single £17.50 payment.