What a rollover contract is
A rollover contract is what happens to a UK business energy supply when an existing fixed contract reaches its end date and neither party has formally agreed a new one. The supplier "rolls" the customer onto a new contract — typically another 12 months — at a unit rate of the supplier's choosing. The customer is then bound to that new contract for the full term, with the same exit-fee constraints as if they had signed it deliberately.
It is important to distinguish three end-of-contract outcomes that are sometimes used interchangeably:
- Renewal — the customer and supplier negotiate and sign a new fixed contract before the old one ends. Rates are agreed; the new contract starts at expiry.
- Rollover — the customer fails to act and the supplier moves the account onto a new contract, usually 12 months, at the supplier's chosen rate. The customer is bound for the new term.
- Out-of-contract / deemed — applied where the customer is at a premises without a contract in place at all, or has objected to a rollover. Rates are typically the highest the supplier offers, but the customer is not locked in for any defined term and can switch with relatively short notice.
Rollover and deemed are both regulated, but with different rules and different practical consequences.
Why rollover rates are typically higher
Rollover unit rates have, for years, been priced on the assumption that the customer is not paying close attention. In our portfolio benchmarking work we routinely see rollover rates priced 20% to 80% above the rate the same supplier would offer to the same customer if tendered for openly. The premium is highest for small business sites and lowest for large half-hourly portfolios where the supplier knows the customer has procurement people watching the contract.
The economic logic is straightforward: a rollover customer has demonstrated, by allowing the rollover to occur, that they will not switch easily. The supplier prices for that. The fix, equally straightforward, is to demonstrate that you are watching — which means tendering before the contract end date and giving formal notice in writing.
Termination notice rules for microbusinesses
Microbusiness customers — defined for this purpose as fewer than 10 employees / FTEs and turnover or balance sheet below €2m, or annual consumption below 100,000 kWh of electricity / 293,000 kWh of gas — have a specific protection. Under Standard Licence Condition 7A and the rules introduced in October 2022, suppliers must:
- Send a renewal letter to a microbusiness customer between 60 and 30 days before the contract end date, setting out the rates they intend to apply if the customer takes no action.
- Allow the customer to terminate the rollover at any time up to 30 days before the contract end date — the so-called "30-day termination window".
- Permit termination during the rollover itself with no early-exit fee where the customer can demonstrate the supplier failed to provide the renewal notification on time.
The practical implication: a microbusiness wanting to switch at contract end must serve written termination notice more than 30 days before the end date. Notice given inside the 30-day window will be honoured (the customer cannot be forced into a rollover against their explicit refusal), but the supplier may then put the customer onto deemed rates rather than re-fix at advertised renewal rates — which is rarely better.
New rules for non-micro businesses
Larger businesses sit outside the SLC 7A microbusiness regime. Until recently their protection against rollover was almost entirely contractual — set by the small print of the original supply contract. The Ofgem Standards of Conduct strengthened in 2024 require suppliers to treat non-domestic customers fairly and to provide reasonable notice of contract endings, but the regime is principles-based rather than prescriptive.
What this means in practice for a larger business:
- Read the original contract for the precise notice period required to terminate at expiry. Common periods include 90, 60 or 30 days; some legacy contracts have shorter or longer requirements.
- Serve notice in the form the contract specifies (written and in some cases by registered post). An emailed notice on a contract that requires recorded delivery has, in case work we have seen, been used by suppliers to refuse the termination.
- If the rollover happens despite a properly-served notice, the new contract is voidable; we have recovered customers from rollovers under such circumstances.
- Where the contract is silent on notice or the rollover term, the Standards of Conduct now provide the customer with a strong argument that any rollover beyond a reasonable transition period (28 days is the working figure) is unfair within the meaning of the licence condition.
A diary system that prevents rollover
Rollover is overwhelmingly an administrative failure — not a strategic one. Almost every rollover we have unwound began with a contract end date that nobody had diarised or that had been diarised by an employee who had since left. The fix is a diary system applied to every supply contract in the portfolio, with three review points:
- End date minus 90 days: appoint procurement support and request indicative pricing from the open market. For a portfolio of more than five meters this is the point to consider whether to tender.
- End date minus 60 days: receive renewal pricing from the incumbent and the tender results from the market. Decide on the preferred outcome.
- End date minus 30 days: serve formal termination notice on the incumbent if you are switching, or sign the new fixed contract with the incumbent if you are renewing. The 30-day deadline is the absolute latest workable date for microbusinesses; for larger businesses it depends on contractual notice period.
This rhythm should be applied automatically to every meter in the portfolio. We embed it as a calendar feed into the procurement systems of clients who retain us; for clients managing in-house, a shared spreadsheet with three diary entries per meter is sufficient.
Letter of Authority and tendering early
One question we are asked frequently: "If I let a consultant tender on my behalf, am I committing to switch?" The answer is no, provided the Letter of Authority (LOA) is correctly drafted.
An LOA is a written authorisation that allows a third-party intermediary to obtain quotes from suppliers on the customer's behalf. A well-drafted LOA does not empower the intermediary to sign a contract — it only allows them to ask for prices. The customer signs any resulting contract themselves, after seeing the prices, or declines and stays with the incumbent.
The LOA terms we recommend asking for in any consultant engagement:
- Time-limited — typically 90 to 180 days. An LOA that runs indefinitely is not appropriate for a tendering exercise.
- Suppliers named or capped — either name the suppliers the consultant may approach, or cap the number. Open-ended approaches generate spam.
- Quote-only, not contract-signing — the LOA must explicitly state that no contract may be signed by the consultant on the customer's behalf.
- Revocable — the customer can withdraw the LOA at any time, in writing.
- Commission disclosure — the consultant must disclose any commission earned on any contract that results, in cash and p/kWh terms, before the contract is signed. (This is required by Ofgem's TPI disclosure rules in any event, but reinforcing it in the LOA is sensible.)
An LOA on those terms is a useful tool. It lets you tender well before the 90-day mark, see the open-market prices, and decide whether to switch — all without any commitment until you sign the contract yourself.
If you'd like an indicative tender on your current contract before its end date, we run them on a no-fee, no-commitment basis. Request a quote with your current contract end date and we'll come back inside two working days.