What this guide covers
This guide explains what a deemed energy contract is, why it happens automatically, and what your options are once you're on one. It is educational information on how deemed contracts work, not a substitute for contacting a supplier directly.
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What a deemed contract actually is
When you move into a property and the gas or electricity supply is already connected, someone has to keep supplying it from the moment you move in, even before you've chosen anything. Ofgem's rules cover this by automatically placing you on what's called a deemed contract with whichever supplier was already supplying the property. You haven't agreed to any specific terms, but you're still responsible for paying for what you use from your move-in date.
Why the rate is usually higher
Deemed contracts run on the supplier's standard variable tariff, sometimes called a default tariff. This is the same category of tariff the Ofgem price cap applies to, so you are protected from unlimited pricing, but standard variable rates are still typically higher than the fixed deals available if you actively shop around. You're not being penalised for being on a deemed contract, you're simply on the tariff nobody has to actively choose, which tends to be the least competitive one on the market.
No exit fees or fixed term
A deemed contract has no end date and no exit fees. Because you never signed up to a fixed term, you can switch away from it at any time without notice periods or termination charges. This is different from being on a fixed deal partway through its term, where the 49-day rule and exit fees can apply.
How to find out who your supplier is
If you've just moved in and aren't sure who supplies the property, the National Grid's "Find My Supplier" tool can identify your electricity supplier by postcode. For gas, your Gas Transporter's website can do the same. Take opening meter readings as soon as you move in and pass them to the identified supplier, so your deemed contract billing starts from an accurate reading rather than an estimate.
Moving from a deemed contract to a chosen one
Once you know who currently supplies the property, you have two options. You can ask that same supplier to move you onto one of their proper tariffs instead of the default rate, or you can compare the market and switch to a different supplier entirely. Both routes work the same way as any other switch, and neither is blocked by being on a deemed contract.