Deemed and out-of-contract rates: what they are and how to get off them

Every business premises with a gas or electricity supply is billed by someone — even if nobody has signed a contract. When there’s no agreed contract in place, suppliers charge default prices. These are usually called deemed rates or out-of-contract rates.

Deemed rates

A deemed contract starts automatically when you begin using energy at a premises without agreeing terms with the supplier — most often when you move into a new unit and don’t contact the existing supplier. You’re “deemed” to have accepted that supplier’s standard prices.

Out-of-contract rates

These apply when a fixed-term contract ends and no new contract has been agreed. Depending on the supplier and your terms, you may be rolled onto a variable or out-of-contract tariff until you agree something new.

Why they usually cost more

Default prices aren’t negotiated around your usage, so they’re typically higher than a contract agreed in advance. Because they can apply for months without anyone noticing, the difference adds up.

How to tell if you’re on one

• Your bill mentions “deemed”, “out of contract”, “variable” or “default” rates.
• You can’t find a contract end date — or the date on your last contract has passed.
• You moved premises and never agreed a contract with the supplier.

What to do next

1. Find a recent bill and note your supply number (MPAN for electricity, MPRN for gas).
2. Take a meter reading so your next bill is accurate.
3. Get quotes for a new contract. Microbusinesses on deemed or out-of-contract terms can generally move to a new contract without exit fees — check your supplier’s terms.
4. Put the new contract’s end date in your diary, with a reminder months ahead.

If you’d like us to check a bill and tell you whether you’re on default prices, get in touch — we don’t charge fees.