Deemed energy contracts explained

Moving into a new home can be an exciting time, but it often comes with an unexpected energy bill: a deemed contract. These are default energy agreements automatically applied when you move into a property without arranging a new energy tariff. They can quickly become a costly burden for new home movers.

Moving into a new home can be exciting, but an unexpected deemed energy contract can add stress. Take control of your energy supply from day one and avoid costly default tariffs. Click here to switch to Fuse Energy and manage your energy with ease.

What is a deemed energy contract?

Understanding the basics

A deemed energy contract is a default energy agreement that automatically begins when you start using gas or electricity at a new property without actively choosing a supplier or tariff. It is not a contract you have signed up for; rather, it is deemed to be in place based on your consumption of energy at the address. These contracts are regulated by Ofgem, the UK's energy regulator, which mandates that suppliers must offer a deemed contract but also allow customers to switch away without penalty.

Why you might be on one

You are most likely to find yourself on a deemed contract if you have recently moved into a new home. When you move, the property often inherits the previous occupant's energy supplier. If you do not proactively set up a new energy tariff before or shortly after moving in, that existing supplier will automatically place you on their deemed contract. This is particularly common for new home movers who are busy with other aspects of settling in and may not realise they need to actively choose an energy deal.

The difference from a standard contract

The key difference between a deemed contract and a standard, actively chosen tariff lies in how they are established and their terms. A standard contract is one you have researched and agreed to, often offering fixed rates or specific benefits. A deemed contract, however, is a default arrangement. While it ensures you have an energy supply from day one, it typically lacks the competitive rates and tailored terms you would find in a contract you have actively selected.

The cost of a deemed contract

Why they are often more expensive

Deemed contracts typically feature higher unit rates and standing charges compared to fixed-term or actively chosen tariffs. Energy suppliers know that customers on deemed contracts have not shopped around, so these tariffs often reflect the supplier's standard variable rates, which can be among the most expensive options available. This means you could be paying significantly more for your energy than necessary. For example, the average UK home uses around 2,500 kWh of electricity per year and 9,500 kWh of gas per year1. Paying higher rates on a deemed contract for this level of consumption can quickly add up.

Financial implications for new home movers

For new home movers, the financial implications of a deemed contract can be substantial. With all the other expenses associated with moving, an unexpectedly high energy bill can be a real strain. Delaying finding out who your current supplier is and switching away can lead to prolonged periods of paying these inflated rates, eating into your budget unnecessarily. It is a common pitfall to assume the previous occupant's tariff automatically transfers or is a good deal, but this is rarely the case.

Your rights under Ofgem

Ofgem regulations protect consumers on deemed contracts, ensuring fair treatment and the right to switch. Crucially, you can switch suppliers from a deemed contract without incurring any exit fees. This means you are not tied into an expensive deal and have the freedom to find a better tariff as soon as possible. Energy suppliers must also provide new occupants with details of their deemed contract within a reasonable timeframe.

How to identify your energy supplier

Knowing who supplies your energy is the first step to taking control of your bills.

Checking your meter

Your energy meter itself can often provide clues. Look for a supplier's logo or contact details printed on the meter casing or on a sticker attached to it. While not always definitive, this can give you a starting point. It is also vital to take a meter reading as soon as you move in, regardless of whether you know your supplier, to avoid billing disputes later.

Using online tools

Several online tools can help you identify your energy supplier:

• For gas supply: Use the Find My Supplier website at https://www.findmysupplier.energy/. You will need your postcode to use this service.
• For electricity supply: Visit What's My Supplier? at https://supplier.nationalgrid.co.uk/. Again, your postcode will be required.

These tools are the most reliable ways to determine who is currently supplying your energy.

What to do if you cannot find them

If the online tools do not provide a clear answer, or if you have a meter-specific issue, you can contact the Energy Networks Association (ENA). The ENA provides a postcode lookup tool on their website ("Who's my network operator?") that can help you identify your Distribution Network Operator (DNO) for electricity or Gas Transporter for gas. DNOs manage the local energy network infrastructure and are responsible for power cuts or supply faults, not for identifying your energy supplier.

Switching away from a deemed contract

Your right to switch

You have a clear right to switch away from a deemed contract without facing any exit fees. This is a crucial consumer protection designed to prevent you from being trapped on an expensive default tariff. Do not delay; switching can lead to significant savings.

Step-by-step guide to changing supplier

1. Identify your current supplier: Use the methods above to confirm who is supplying your gas and electricity.
2. Take meter readings: Record accurate meter readings on the day you move in and keep them safe. This ensures you are only billed for the energy you use.
3. Understand your current tariff: Ask your current supplier for details of your deemed contract, including unit rates and standing charges.
4. Compare tariffs: Use an Ofgem-accredited price comparison website to compare tariffs from various suppliers. Look for deals that suit your usage habits, whether fixed-rate or variable.
5. Initiate the switch: Once you have chosen a new tariff, your new supplier will handle the switching process. This typically takes up to 5 working days.
6. Provide final meter readings: Your new supplier will request a final meter reading on the day your switch goes live.

What to do before you switch

Before you initiate a switch, make sure you have your initial meter readings and any correspondence from your current supplier. It is also a good idea to have an estimate of your annual energy usage, which can help you get more accurate quotes when comparing tariffs. Do not worry if you do not have a full year's data; comparison sites can often estimate based on property size and number of occupants.

Tips for new home movers

Taking initial meter readings

Upon moving into your new home, take clear, dated photographs of your gas and electricity meters showing the readings. This provides undeniable proof of your starting consumption and can prevent future billing disputes. Send these readings to your current supplier as soon as you identify them.

Comparing tariffs effectively

When comparing tariffs, do not just look at the headline price. Consider the unit rates, standing charges, contract length, and any exit fees (though these will not apply to your deemed contract). Read customer reviews and check the supplier's customer service ratings. Fuse Energy's transparent app provides clear visibility of energy usage and tariffs, empowering customers to understand and manage their energy, unlike opaque deemed contracts. Fuse also offers human customer support to assist new home movers with understanding their energy options and switching away from deemed contracts.

Avoiding future deemed contracts

The best way to avoid deemed contracts is to be proactive. Before you move, or as soon as you have your new address, start researching energy suppliers and tariffs. Contact your chosen supplier to arrange a new contract to begin on your move-in date. This ensures you are on a competitive tariff from day one, giving you peace of mind and control over your energy costs.

Managing your energy bills should be clear and easy to understand. Fuse Energy focuses on straightforward pricing, so you can see exactly what you are paying without unnecessary complexity. If you have a smart meter, you can view detailed usage data through the app or website, helping you understand how you can lower your bills. If you do not have a smart meter, Fuse Energy can upgrade your non-smart meter, completely for free. This can make it easier to track spending and make informed decisions about your energy use. Our support team is always on hand with fast response times whenever you need help. Click here to switch to Fuse Energy today. Find out about our mission by clicking here.