What is a fixed-price tariff?
With a fixed tariff, the amount you pay for each unit of energy won’t change for a set period of time. This is usually 12 or 24 months.
This kind of tariff can help with budgeting as you’re insulated from price increases for the duration, so you won’t be hit by any bill shocks.
But on the downside, you’ll be at a disadvantage if energy prices fall, as you won’t feel the benefit.
In addition, if you decide to switch again during the period of the fix, you could be hit with exit fees.
What is a standard variable tariff?
A standard variable tariff (SVT) is your energy supplier’s default tariff. If you’ve never switched energy supplier – or you haven’t switched in the past two or three years – you will probably be one of the 60% of consumers in the UK on an SVT.
If so, you are likely to be paying more than you need to for your gas and electricity bills, as SVTs are often significantly more expensive than most fixed-rate tariffs. This is why it makes sense to switch and fix.
According to research by MoneySuperMarket, savings of £280* a year are available to typical households with average energy consumption when they switch from an SVT to a fixed-rate tariff.
What is a dual-fuel tariff?
A dual-fuel deal is one where both your gas and electricity come from the same energy provider. As you only have to deal with one supplier, this type of tariff can make your bills a lot easier to manage.
Dual-fuel tariffs are usually competitively priced, and providers often offer a discount if you get both fuels from them. You should always do your research – comparing both dual-fuel tariffs and single-fuel tariffs – to see which the best option is for you.
How does a prepayment meter tariff work?
With a prepayment meter, you pay for the gas and electricity you use up front, rather than in monthly or quarterly instalments.
You top up using a card or key to load more money onto your meter – just as you would with a pay-as-you-go mobile phone, though you may also be able to top up online.
According to Ofgem data correct as of October 2019
One of the big advantages of a prepayment meter is the fact you can keep an eye on exactly how much you are spending. But on the other hand, this option is often more expensive, and it can sometimes seem as though the meter is eating through your money.
In addition, if you are unable to afford to top up your meter – or forget to do so – you risk running out of credit.
If this happens, your power will be temporarily switched off until you top up – not convenient if you need more electricity in the middle of the night.
How do energy price caps work?
Energy price caps are maintained by Ofgem, the energy market regulator, and are designed to limit how much consumers pay for energy.
The latest price cap was set in July 2020 and stands at £1,042. The caps are reviewed every six months and will next be updated in February 2021.
How does an Economy 7 tariff work?
With an Economy 7 tariff, you get a cheaper rate for your energy at night during ‘off-peak’ hours. This is usually a seven-hour period – between 1am and 8am in the winter, and between 2am and 9am in the summer – hence the name ‘Economy 7’.
This type of tariff can make sense if you have storage heaters and a hot water tank which can be heated up at night, and which will then release their heat and hot water the following day.
The problem with an Economy 7 tariff is that if you use energy at the wrong time, it can be very costly. So if you’re thinking of moving to Economy 7, check carefully if this is the right tariff for you before making the switch, as it requires more discipline and planning than most others.
What is a green energy tariff?
Many energy companies now offer you the option of a green tariff. We get green energy specifically from renewable sources, such as wind power, solar power or wave power – rather than non-renewable sources, such as oil and coal.
While these environmentally-friendly tariffs used to come at a premium, prices are now becoming more competitive. If this type of tariff appeals, note that some smaller suppliers may have deals that compete with more mainstream providers.
What is a business energy tariff?
As a business owner, you will want to find a tariff suited specifically to the needs of your business – and this is where commercial energy contracts come into play.
When considering a business tariff, it’s important to note that commercial suppliers work differently from domestic suppliers. MoneySuperMarket can help you find a competitive deal that suits the needs and budget of your business – and you could save up to £713 on your energy bills.**
Compare energy tariffs
If you are looking to compare energy deals, you should make use of MoneySuperMarket’s comparison service.
You will be presented with a list of tariffs so you can find the right one for you.
And if you want to take control of your energy bills going forward, you can do this quickly and easily with MoneySuperMarket’s Energy Monitor. You can sign up for alerts and we’ll let you know as soon as there’s a cheaper tariff available for you – meaning you can switch and save money on your bills.
*51% of customers that applied to switch via MoneySuperMarket could save at least £289.40, March 2020.
**At least 10% of businesses who switched energy supplier for both gas and electricity with Make It Cheaper in February 2019 saved £713 or more.