Business energy
Out-of-contract
energy rates
The costly default to avoid
30+ UK suppliers- Out-of-contract / deemed rates are the default — usually expensive — tariff you're moved to when a contract ends without a new one agreed.
- They're typically well above negotiated contract rates, so they can sharply increase your bill.
- You avoid them by acting before your contract end date — you can usually agree a new deal months ahead.
- Knowing your contract end date is one of the most useful things you can do with your energy bill.
If your business energy bill has suddenly jumped, there's a common culprit: you may have fallen onto out-of-contract or deemed rates. These are the default tariffs suppliers apply when you don't have an agreed contract — and they're rarely cheap.
Deemed vs out-of-contract
The two terms are related. Deemed rates usually apply when you move into premises and start using energy without agreeing a contract (for example, a new tenant). Out-of-contract rates apply when an existing contract ends and you haven't signed a new one. Either way, you're on the supplier's default terms — not a deal you negotiated.
Why they cost more
Because there's no agreed contract, suppliers price in the risk and uncertainty, so deemed and out-of-contract unit rates and standing charges are typically well above what you'd pay on a negotiated contract. On higher usage, that difference adds up quickly.
How businesses end up on them
Usually by simply not acting in time — a contract quietly ends, and the supplier rolls you onto default rates until you agree something new. With business energy having no price cap, there's no safety net holding those rates down.
How to avoid them
The fix is straightforward: act before your contract end date. You can usually agree a new deal months in advance and have it start when your current one ends, so you never touch default rates. The key is knowing your contract end date — see our guides on when to renew and reading your energy bill.
Not sure when your contract ends, or think you're on default rates? Send us a recent bill and we'll check — and compare the market for you. Free, no obligation. Call 0845 862 1947 or get in touch.
Out-of-contract rates are one of the easiest costs to avoid entirely. Know your end date, line up a new contract before it, and you'll never pay the lapse penalty that catches so many businesses out.