Benefit periods and contract terms—how do they work?

When you’re comparing offers, sometimes it’s hard to tell the difference between an offer with a benefit period, and an offer with a contract term. Here’s how they work.

Not sure what kind of contract you're on?

Check your most recent energy bill. If your energy bill isn't clear, ask your retailer.

Ongoing contract with benefit period

As the name suggests, when an offer has a benefit period, it means that you get a particular “benefit” for a set period. Usually the benefit is a discount.

When the benefit period ends, often the contract keeps going at the same prices but you no longer get the discount. If this is the case, take the opportunity to look around to see what other retailers are offering and ask your current retailer if they’ve got a better offer.

Sometimes retailers automatically apply a new benefit period when your first benefit period ends, so you keep receiving a discount. If a new benefit period is applied, make sure you check the amount of the discount and tariffs as these may have changed. If you find you’ve been put on a new benefit period, check whether you will have to pay exit fees to leave. If you do, and you don’t want to be locked in, talk to your retailer. If the issue does not get resolved you can contact your local energy Ombudsman.

Your retailer may not tell you when your benefit has expired or is about to expire.

When signing up to an offer with a benefit period, ask them whether they’ll tell you.

If they won’t, keep an eye on your bills to see if you’re receiving your benefit. You could even put a note in your phone calendar to remind you when the benefit period ends.

Contracts with a term

When an offer has a contract term—such as one, two, or three years—it means the contract ends when the term finishes.

Prices can change while you are on this kind of contract. However, some retailers do have offers where the prices are fixed during the contract term.  

There may be an exit fee if you leave your contract during the contract term.

When the contract term ends, your retailer will usually put you onto their local standing offer. Standing offers have no discounts and no exit fees, and the rates are usually higher. 

Your retailer must tell you when the contract term is about to expire.

This is a good time to compare offers on Energy Made Easy.

Offers with no contract term

These are offers without a contract term or benefit period, although you may still get a discount or other benefit.

These offers continue until you or the retailer decide to end it.

Usually, offers with no contract term don’t have fixed prices. Prices can change at any time, and your retailer must notify you no later than your next bill.

If you’re on a ‘no contract term’ offer, it’s a good idea to visit Energy Made Easy occasionally to see what offers are available. You just might find something that works better for you.

Last updated on Wednesday, December 14, 2016 - 15:32