Discount for paying a year upfront — is that safe?
A 3-7% discount looks attractive but you carry the supplier's bankruptcy risk for 12 months. We explain how to weigh.
Year-upfront offers vary between suppliers (3-7% off fixed fees + bare supply price). Risk: on bankruptcy your upfront euros are an unsecured creditor claim — you join the queue, repayment uncertain. The backstop scheme guarantees supply continuity but NOT refund of upfront. Safety assessment: (a) suppliers with big parent groups (Eneco/Mitsubishi, Vattenfall, Essent/E.ON) — low risk; (b) mid-size standalone suppliers with good ratings — medium; (c) new small price-aggressive suppliers with no track record — high. Rule of thumb: 7% off at a new unfamiliar supplier is too much risk for too little return. Better: pay monthly at a trustworthy party.