How do I get off a deemed or out-of-contract rate?

Moving onto a deemed or out-of-contract rate is not a trap. There is no exit fee, and you can leave whenever you like. The only job is to pick a new deal and start it.

Your options

• Switch to a new supplier. Agree a fixed or flexible contract with another supplier and let them run the switch.
• Stay and sign a proper contract. Ask your current supplier for a fixed-term deal. You may need to push, because their first offer may not be their best.

Either way, the deemed or out-of-contract rate ends when the new contract begins. See our guide to deemed and out-of-contract rates for how you land on them in the first place.

Why there is no penalty for leaving

Ofgem's rules, in force since 1 October 2022, say a supplier cannot charge a termination fee to a customer who is out of contract. They also say a supplier cannot make a microbusiness give notice to leave, with one exception: an evergreen contract can ask for up to 30 days' notice. If you are unsure what counts as a microbusiness, read what is a microbusiness for energy.

Deemed rates usually start when you use energy at premises with no agreed contract, and suppliers such as E.ON Next describe them as having no exit fee. Always check your own paperwork, because a fixed deal that has simply ended is treated differently from a deemed contract.

Step by step

1. Find your rate. Look at the latest bill for words such as deemed, out-of-contract or standard variable.
2. Get your numbers ready. You need the address, your supply numbers (MPAN and MPRN) and your annual usage. A bill usually shows the lot.
3. Get quotes. Our page on what you need for business energy quotes lists the details. Ask for the total cost over the term, including any broker fee.
4. Agree the deal and give a start date. There is no cooling-off period once you agree a business contract, so read the terms first.
5. Take a meter reading on switch day so your old and new bills split at the right point.

What waiting costs: a worked example

Take a small café using 12,000 kWh a year. MoneySuperMarket Business published average rates on 21 October 2026. They are indicative, and the page has some internal inconsistencies, but they show the size of the gap:

	Unit rate	Standing charge	Yearly cost before CCL and VAT
Out of contract	40.0p/kWh	254.0p/day	12,000 × 0.40 = £4,800 plus 254p × 365 = £927.10, total £5,727.10
Micro fixed average	28.4p/kWh	58.0p/day	12,000 × 0.284 = £3,408 plus 58p × 365 = £211.70, total £3,619.70

The difference is £2,107.40 a year, or about £175.62 a month. Your own quotes will differ, but every month on a deemed rate is usually dear.

Use our out-of-contract cost calculator with your own bill figures.

Things that can slow you down

• Debt on the account. A supplier may object to a switch if you owe money. See switching when you owe money.
• Unclear occupier. If the supplier disputes that you took over the premises, you may need to show a lease or sale papers.
• Not actually deemed. If you are in a fixed term, there may be early exit charges, which is a different situation.

Next steps

Pull out your latest bill, note your annual usage, and ask at least two sources for quotes this week. Our guide to switching covers the process from start to finish.