What are out-of-contract business energy rates (and how do you escape them)?

Out-of-contract energy rates are the higher default tariffs you're charged when your fixed deal ends and you haven't agreed a new one. They can be substantially more expensive than a negotiated contract. You can escape them by comparing the market and switching to a new fixed rate — usually within a few weeks, with no interruption to your supply.

What "out of contract" actually means

When you sign a business energy contract, you agree a fixed unit rate for a set term. When that term ends, you don't simply stop being supplied — instead, your supplier moves you onto their default rates. Depending on the circumstances these are called out-of-contract, deemed, or out-of-contract variable rates, and they nearly always sit among the most expensive tariffs a supplier offers.

The logic is simple from the supplier's side: a business that hasn't actively renewed is a business that isn't shopping around, so there's little pressure on them to price competitively. The result is that thousands of businesses quietly overpay, often without realising the deal they signed up to ended months ago.

Why these rates are so high

Out-of-contract rates carry a premium for a few reasons. Suppliers price in the uncertainty of not knowing how long you'll stay, they're not competing for your business the way they would for a new contract, and there's no negotiated discount applied. The gap between a competitive fixed rate and an out-of-contract rate can be significant — for a higher-usage business that difference can run to thousands of pounds a year or more.

How businesses end up here

It's rarely carelessness — it's usually just busy operators with a lot on. Contract end dates pass unnoticed, renewal letters get buried, or a business assumes their rate simply continues unchanged. Multi-site operations are especially prone to it, with different premises ending contracts at different times. The first sign is often a noticeably higher bill with no obvious explanation.

How to escape out-of-contract rates

The good news is that getting off these rates is usually quick and straightforward.

Check your status. Look at your latest bill or contract paperwork for your end date — if it's passed, you're likely out of contract. If you can't find it, we can confirm it with your supplier via a quick Letter of Authority.

Compare the market. Rather than just accepting a renewal offer, compare across suppliers. We check 15+ and send you the best options in plain English.

Switch. Once you've chosen a rate, the switch typically completes within a few weeks. The same supply reaches your premises through the same network — nothing physical changes, and there's no downtime.

Unlike out-of-contract rates, which have no end in sight, a fixed contract gives you a known cost you can budget around.

On an out-of-contract rate right now? Get a free comparison → and see what you could save.

Frequently asked questions

Why are out-of-contract energy rates so high?
Because suppliers aren't competing for your business once your contract ends, and they price in the uncertainty of not knowing how long you'll stay. There's no negotiated discount, so the default rate is among their most expensive.

Can I switch supplier while out of contract?
Yes. Being out of contract usually makes switching easier, as you're not tied in by an existing agreement. You can compare and move to a new fixed deal whenever you're ready.

How quickly can I get off out-of-contract rates?
Once you've agreed a new rate, a switch typically completes within a few weeks. The sooner you start comparing, the sooner you stop overpaying.