Millions of UK households may be paying far more than they should on their energy bills without even realising it. According to Ofgem, thousands of customers each month remain on “deemed” or “out-of-contract” tariffs — some of the most expensive rates in the market — simply because they’ve failed to update or switch their energy accounts after moving home or changing tenants.
Energy experts warn that these inactive accounts often go unnoticed, leading to unnecessary overpayments of hundreds of pounds per year. For households trying to manage costs during another volatile winter, checking tariff status and using a dual fuel energy comparison tool could make a significant difference.
How inactive accounts develop
When a tenant moves out, sells their property, or changes supplier, the existing energy account does not automatically close. If the new resident fails to contact the energy provider, the account remains “deemed” — meaning they are supplied energy without an official contract.
In these cases, suppliers set default tariffs that are often 15–30% higher than standard variable rates. These tariffs are designed to cover the risk of unpaid bills, but for active residents, they can quietly drain household budgets.
Data from Ofgem shows that around 1.3 million households were on deemed or default tariffs at the end of summer 2025, costing UK consumers over £200 million collectively. In many cases, the issue persists for months simply because people are unaware their account status is inactive.
The financial impact of doing nothing
An inactive account doesn’t just mean higher unit rates — it also removes access to direct debit discounts and competitive fixed deals. A typical dual fuel household on a deemed tariff could pay up to £300 more per year compared with those on standard rates.
For example, a home using 12,000kWh of gas and 3,100kWh of electricity might spend around £1,850 annually on a deemed tariff, compared with £1,520 on an actively managed dual fuel deal. Over two years, that difference exceeds £600 — enough to cover several months of average broadband or council tax payments.
Even if the resident pays their bills on time, the supplier has no incentive to move them to a cheaper tariff without direct instruction. The only way to correct the issue is to contact the supplier or run a dual fuel energy comparison to find an active, cheaper plan.
Why it happens so often
Moving home remains the most common trigger for inactive energy accounts. Many people assume that utilities transfer automatically when they move into a new property, but energy accounts are not linked to addresses in that way. Instead, they are linked to the named account holder.
As a result, new occupants may unknowingly continue on the previous tenant’s default tariff for months. Others may stay with their existing supplier after moving, assuming the tariff remains the same — but most contracts are cancelled automatically when a property change occurs.
In shared accommodation or short-term lets, the issue is even more widespread. When multiple tenants move in and out, accounts are often left in limbo until someone takes responsibility. Meanwhile, suppliers continue charging default rates.
How to identify if your account is inactive
Many people don’t realise they are on a deemed tariff until they receive a higher-than-expected bill. Signs include:
- A bill that does not list a tariff name or unit rate breakdown
- Missing contract start or end dates
- No mention of fixed or variable tariff terms
- Receiving generic letters referring to “standard rates”
If any of these apply, the account is likely inactive or defaulted. The quickest fix is to contact the supplier directly and ask for a formal tariff quotation. Alternatively, entering your postcode and estimated usage into an online tool like Free Price Compare can show if cheaper tariffs are available immediately.
Why suppliers rarely alert customers
Although Ofgem rules require suppliers to display tariff information on bills, they are not obliged to contact customers about inactivity. Many rely on customers to get in touch first. Some suppliers may send letters about “better tariffs available,” but these are often missed, especially during a move or tenancy change.
Industry observers argue this system discourages competition and transparency. Ofgem has previously fined suppliers for failing to clearly inform customers about contract status or available cheaper tariffs. Yet, the problem continues — partly because energy companies profit from the higher margins on deemed rates.
Simple steps to avoid paying more
Avoiding the hidden costs of inactive energy accounts is straightforward once you know what to check:
- Contact your supplier as soon as you move into a new home.
- Ask for written confirmation of your current tariff name and unit rates.
- Compare those rates against the latest offers using Free Price Compare.
- Consider switching both gas and electricity together through a dual fuel energy comparison for better value.
- Keep copies of bills to verify when your tariff renews or changes.
Ofgem also advises submitting meter readings immediately after moving in. This prevents suppliers from estimating usage based on previous residents, which can cause inflated opening bills.
Why switching is still the best safeguard
While government reviews of standing charges and energy debt relief continue, the fastest and most reliable way to cut costs is still to find cheaper energy deals. Unlike policy changes, which can take years to implement, switching can reduce bills within weeks.
With average annual energy costs now at £1,755 for a typical household, even small percentage savings translate into meaningful reductions. For those unknowingly on default or inactive tariffs, switching could deliver savings of £200–£400 almost immediately.
Key takeaway
Inactive energy accounts are a silent source of wasted money in UK homes. Whether caused by a house move, tenancy change, or simple oversight, these tariffs remain among the most expensive on the market. By using comparison tools such as Free Price Compare, running a dual fuel energy comparison, and taking a few minutes to find cheaper energy deals, households can quickly fix inactive accounts and ensure they only pay for the energy they actually use.
