Rollover contract

What it is

A rollover is when a supplier renews your fixed-term contract automatically at the end of the term, instead of letting you drift onto an out-of-contract rate. Ofgem's supply licence rules for microbusiness contracts (standard licence condition 7A) allow it only if certain conditions are met: the supplier must have given the required renewal information (a Statement of Renewal Terms and Principal Terms), you must not have served notice that prevents renewal, and the rollover must be 12 months or less.

Where you will see it

• In contract terms, often as an "automatic renewal" clause.
• In a renewal letter sent before the contract ends.

Why it matters

A rollover can lock you into a new price you did not shop around for. Prices on rollover are often higher than on the open market, and leaving a new fixed term early may bring termination charges. Act during the notice window to stop it, and put the dates in your diary. Read rollover business energy contracts, how long it can last and how to stop it.

Example

A garage's contract ends on 31 March. The renewal letter says it will roll over for 12 months unless notice is given by 31 January. The owner misses the date. If the new rate is 3p/kWh dearer on 18,000 kWh, that is 18,000 x £0.03 = £540 extra over the year compared with a deal they might have found.

Exact notice windows depend on your contract, so check yours.

Related terms

Evergreen contract and out of contract rate.