The UK’s largest electricity supplier has introduced new fees for customers on fixed contracts – and people are not happy
Octopus Energy has put up prices to leave fixed contracts as power prices soar as the Iran war escalates(Image: Getty Images)
The conflict in Iran has forced hugely popular energy supplier Octopus to introduce new charges – raised twice within a single week – triggering outrage amongst customers. Octopus Energy is Britain’s biggest electricity provider, supplying more than 7 million homes, and this week it has announced alterations which users branded ‘shameful’ and which ‘should be illegal’.
The Iranian conflict has caused oil and gas prices to skyrocket – prompting the firm to announce the introduction of new ‘exit fees’ for those on fixed-term contracts. The charges have risen from nothing to £50 and then £75 over the past week, affecting new customers.
One user posted on X: “Incredibly poor customer service from @OctopusEnergy to put the exit fees up from £0 to £50, then to £75 all in one week for customers looking to switch tariffs. Shameful.”
DarkAngel remarked: “Should be illegal. Why changed the rates too compared to last year.” MSH questioned: “So will your prices come down when this gulf war ends, you were very quick to raise the price of gas by 50% the day after it started, smacked of profiteering to me, not the company you once were Octopus Energy @OctopusEnergy,.
Clive enquired: “Will the exit fees be removed as soon as the energy market settles down. What’s your threshold for this ?” Minty observed: “Another company on the list that is sucking every penny from us, I bet you post massive profits.”
DevonDad retorted: “If you have to sell the energy because customers leave early and you make a profit on it can we have any money back? Thought not. When my contract ends you’ll lose my custom.”
In response to the wave of protest, Octopus stated: “Tariff rates change all the time with wholesale fluctuations – the volatility can be unpredictable sometimes, so locking in a fix means we buy 12 months of energy to secure a unit rate. Rates for anyone already on a fix don’t change. We’ll continue to monitor wholesale costs closely as always and update our tariffs when we must – dropping rates as quickly as possible.
“These are changes we genuinely dislike making. With a fixed tariff, we buy 12 months of energy upfront at the prices available that day, which keeps your bills steady regardless of how the market changes later. We typically don’t do exit fees and instead just absorb the cost if customers leave early, but the current, super volatile market makes that trickier.
“To keep giving customers the best price possible, we need to introduce an exit fee for new fixed tariff sign-ups. We’re here to help and can chat through options, just send across a DM. The current, super volatile market makes everything really tricky. To keep giving customers the best price possible, we need to introduce an exit fee for new fixed tariff sign-ups. If you’re already on a fix, don’t worry, your terms haven’t changed.”
On the topic of Iran, they stated: “Historically, we usually haven’t put exit fees on our tariffs, preferring to absorb these costs ourselves to give you total flexibility. But occasionally, when prices get really volatile, we’ve had to introduce them so we can continue to offer you the lowest possible fixed rates. The first time was in 2022, amid the energy crisis triggered by the war in Ukraine; the second came in March 2026, when prices soared during conflict involving Iran and the wider Middle East.
“Exit fees ensure we don’t have to “price in” the risk of people leaving, which ultimately keeps your unit rates cheaper. In short, exit fees aren’t there to trap you: they are a tool that allows us to offer cheaper long-term price certainty in an unpredictable market.”
For more information on the Octopus changes click here. A spokesperson for Octopus Energy commented: “We are still offering fixed tariffs and will continue to do so for as long as we can, despite the extremely challenging situation in the Middle East.
“There is no shortage of energy supply. However, wholesale energy prices have risen considerably this week, and we can no longer absorb the full cost of the energy we buy in advance for new fixed‐tariff customers if they choose to leave us during the period of the fix. Because of this, we have had to introduce exit fees temporarily, but only for customers who choose to take out a new fixed tariff. Of course, most other suppliers have exit fees even in normal circumstances but it’s rare for octopus. Like during the pandemic and the last energy crisis, Octopus will continue to keep prices as low as possible for our customers, even if that means sacrificing profits.”
Household energy bills are predicted to climb by 10% from July following steep rises in wholesale gas prices fuelled by the intensifying conflict in the Middle East, experts have cautioned.
Analysts Cornwall Insight revealed that projections for Ofgem’s price cap between July and September had jumped to £1,801 annually for a typical dual fuel household – a rise of £160 or 10% compared to April’s cap announced last week.
Cornwall described the increase as a “cause for concern” and cautioned that any rise would also impact electricity prices.
Nevertheless, it noted that the final price cap figure would be calculated based on average wholesale prices across a three-month period, meaning it would hinge on how long gas prices remained elevated and the duration of the volatile period. Wholesale markets have surged amid heightened regional tensions in the Middle East.
Martin Lewis has called on customers of energy suppliers including E.On, British Gas, OVO and Octopus to change their tariffs ‘right now’. The money-saving expert issued the alert as gas and oil prices soared amid escalating tensions in the Middle East.
Concerns are mounting over sharp rises in petrol costs and household energy bills, which could strike UK families hard in the coming months. Posting on X, Mr Lewis cautioned: “Important: If you can get off the Energy Price Cap right now, you should and urgently!”.
“The wholesale gas rate is spiking due to the Iran conflict, and it is a prime driver or UK elec prices. If that’s sustained (big if), it will likely push the Price Cap rate up from July”.
“Some of the cheap fixes from before the weekend haven’t (yet) been pulled, so you can still lock in a rate at around 14% less than the current Price Cap, both saving you money and giving peace of mind that the rate can’t rise. You can do a whole-of-market comparison via http://cheapenergyclub.com
“However, many firms are reassessing their fix prices today and may reprice their deals upward. There’s a risk many of the current cheapest fixes will be gone by this time tomorrow. Plus, fix now, and unprecedentedly the rate you lock in at will be reduced on 1 April. This is because govt is changing the underlying way energy bills work and moving some policy costs to general taxation. That reduces the elec and gas unit rates even for those already on fixes. So even if you fix now the amount you pay will drop by 7% to 9% on typical usage on 1 April.”
