Understanding Energy Tariffs in the UK
An energy tariff is the pricing plan you agree to with your gas or electricity supplier. It sets out how much you pay for your energy, including the cost per unit (measured in kWh) and any daily standing charges. The tariff you choose can have a big impact on your household bills and how predictable your payments are.
There are several main types of energy tariffs available in the UK:
Fixed tariffs: These lock in your unit price and standing charge for a set period, usually 12 to 24 months. This means your rates won’t change during the contract, even if wholesale energy prices rise or fall. Fixed tariffs offer price certainty but may include exit fees if you switch before the contract ends.
Variable tariffs: With a variable tariff, your prices can go up or down depending on the market and your supplier’s costs. The most common variable tariff is the standard variable tariff (SVT), which you’re often moved to when a fixed deal ends. While they offer flexibility, your bills could rise if prices increase.
Green tariffs: These tariffs promise that some or all of the energy you use will be matched by purchases of renewable energy or carbon offsets. Green tariffs are ideal if you want to support sustainable energy, but they can sometimes be more expensive.
Prepayment tariffs: If you have a prepayment meter, you pay for your energy in advance by topping up a key or card. While this can help you manage your budget, prepayment tariffs are often pricier than direct debit plans and may offer fewer choices.
Before switching, it’s important to know your current tariff and supplier. This information is usually found on your latest energy bill or by contacting your supplier directly. Understanding your existing deal helps you compare new offers more accurately and avoid any exit fees or penalties.
When choosing a new tariff, you have legal protections under UK consumer law. Suppliers must clearly explain contract terms, charges, and any fees. You have a right to switch suppliers without unfair barriers, and there are rules to prevent misleading sales practices. Ofgem, the UK’s energy regulator, provides further guidance on these protections and offers a step-by-step guide to switching in their Switch energy supplier | Ofgem resource.
If you’d like to learn more about your rights and responsibilities as energy consumers, including how to resolve disputes or what to expect from your supplier, visit our dedicated overview. Understanding these basics will help you make informed choices and ensure you get the best deal for your household.
How to Compare Energy Tariffs
When comparing energy tariffs, it’s important to look beyond just the headline price. Several factors can affect your overall costs and how suitable a tariff is for your household. Here’s how to approach the process to make sure you find the best deal for your needs:
Key Factors to Consider
1. Price:
Check both the unit rate (the cost per kWh of gas or electricity) and the standing charge (a daily fixed fee). Some tariffs may offer lower unit rates but higher standing charges, so consider your typical usage to see which works out cheaper for you. If you’re unsure about your average consumption, your current bill or annual statement should provide this information.
2. Contract Length:
Tariffs can be fixed-term (usually 12, 18, or 24 months) or variable. Fixed tariffs lock in your rates for the duration, protecting you from price rises, while variable tariffs can go up or down. Make sure you’re comfortable with the commitment period, especially if you might move home or want flexibility.
3. Exit Fees:
Some fixed-term tariffs charge an exit fee if you leave before the contract ends. These fees can vary, so check the terms carefully. If you value flexibility, look for tariffs with no or low exit fees.
4. Payment Methods:
Suppliers may offer discounts for certain payment methods, such as paying by monthly Direct Debit. Consider which payment option suits your finances and whether the tariff requires a specific method.
Using Comparison Tools
Online comparison tools can help you quickly see what tariffs are available in your area and estimate potential savings. These tools allow you to input your energy usage and preferences, helping you compare like-for-like deals. For a more detailed look at how to compare different suppliers as well as tariffs, visit our guide to compare UK energy suppliers.
Tariffs vs. Suppliers
It’s important to understand the difference between a tariff and a supplier. The supplier is the company providing your gas or electricity, while the tariff is the pricing plan you choose from that supplier. Different suppliers may offer similar tariffs, but their customer service, green energy options, and additional perks can vary. Always consider both the terms of the tariff and the reputation of the supplier before making a decision.
Reading Tariff Terms and Conditions
Before committing to a new tariff, read the terms and conditions carefully. Look for details on:
How prices may change (especially for variable tariffs)
Any discounts or rewards, and how to qualify for them
What happens at the end of a fixed-term deal (e.g., automatic rollover to a standard tariff)
Terms for switching or cancelling your contract
If anything is unclear, ask the supplier for clarification. Under Ofgem regulations, suppliers must provide clear, accurate information about their tariffs and notify you of any changes.
Matching Tariffs to Your Needs
Not all tariffs are suitable for every household. For example, some deals are only available to customers with smart meters, or to those willing to manage their account online. Check whether the tariff fits your usage patterns (such as Economy 7 tariffs for homes using most electricity at night) and your preferred way of managing bills.
By carefully considering these factors and using reliable comparison tools, you can make an informed choice and avoid unexpected costs or contract issues. If you want to explore supplier options further, don’t forget to compare UK energy suppliers for a full picture of what’s available.
Understanding Contract Terms and Conditions
When choosing an energy tariff, it’s important to read and understand the contract terms and conditions before you sign up. This helps you avoid unexpected charges, spot misleading offers, and make sure you’re getting a fair deal.
Common Contract Terms Explained
Fixed vs Variable Rates:
A fixed rate tariff means your unit price for gas or electricity stays the same for a set period (often 12 or 24 months). This can protect you from price increases, but you won’t benefit if market prices fall. A variable rate tariff can go up or down depending on the market, so your bills may change over time.
Contract Length:
Most energy contracts last between 12 and 24 months, but some may be shorter or longer. Check the contract length so you know when your deal ends and when you can switch without penalty.
Exit Fees:
Some contracts charge an exit fee if you leave before the end date. This is usually between £20 and £60 per fuel, but it should be clearly stated in your contract. If you’re on a variable tariff or your fixed contract has ended, you can usually switch without paying an exit fee.
Renewal Processes:
Suppliers must notify you before your contract ends, usually at least 42 to 49 days in advance. This gives you time to review your options and switch if you want. If you don’t act, you may be moved to a more expensive standard variable tariff.
Spotting Unfair Terms or Misleading Offers
Be cautious of terms that seem unclear or heavily favour the supplier. For example, watch out for:
Hidden charges not mentioned upfront
Automatic rollovers to higher-priced tariffs
Restrictions on switching or penalties that seem excessive
Suppliers must follow the rules set out by Ofgem and the Consumer Rights Act 2015. If a term seems unfair or misleading, you have the right to challenge it.
To better understand your rights and avoid fraud when reviewing energy contracts, see our guide on how to know your rights and avoid fraud.
Promotional Deals and Discounts
Promotional offers, such as cashback or introductory discounts, can be tempting. However, always check:
How long the discount lasts, and what the price will be after the promotion ends
Any conditions you must meet to qualify for the offer
Whether the deal is genuinely better than standard tariffs over the full contract term
Don’t be swayed by upfront savings if the long-term costs are higher.
Your Rights on Cancellation and Renewal
You have a 14-day “cooling-off period” after signing up for a new energy contract. During this time, you can cancel without penalty. Suppliers must also give you clear renewal notices before your contract ends, allowing you to switch or renegotiate.
If you believe your contract contains unfair terms or you’ve been misled, you can raise a complaint with your supplier or escalate it to the Energy Ombudsman if needed.
Understanding your contract terms helps you make confident choices, avoid surprises, and ensure your energy deal is right for you.
Switching Energy Tariffs and Suppliers Safely
Switching Energy Tariffs and Suppliers Safely
Switching your energy tariff or supplier can help you save money and find a deal that better suits your needs. However, it’s important to handle the process carefully to avoid unnecessary fees or disruption to your supply. Here’s a step-by-step guide to switching safely and confidently.
1. Review Your Current Tariff and Contract Terms
Before you begin comparing new deals, check the details of your current energy tariff. Look at your latest bill or log in to your online account to find out:
Your current tariff name and type (fixed, variable, or prepayment)
The contract end date
Any exit fees for leaving early
Your current usage and monthly payments
If you’re on a fixed-term deal, leaving before the contract ends may incur an exit fee. However, suppliers cannot charge an exit fee if you switch within the last 49 days of your contract, as per Ofgem regulations.
2. Check for Outstanding Balances or Credit
Make sure your account is up to date. If you owe money, clear any outstanding balance to avoid delays. If your account is in credit, you have the right to claim back credit from your old supplier after switching.
3. Compare Tariffs and Choose a New Supplier
Research and compare tariffs from different suppliers based on price, contract terms, and customer service. Consider whether you want a fixed or variable rate and check the terms for discounts or special offers.
4. Start the Switching Process
Once you’ve chosen a new deal, your new supplier will manage the switch for you. You’ll need to provide some details, such as your address and a recent meter reading.
For a detailed breakdown of the process, see our guide on switching energy supplier.
5. What Happens During the Switch
The switching process typically takes around 5 working days, though it can be longer if you choose a later start date. By law, your energy supply will not be interrupted – your gas and electricity will continue as normal throughout the switch. Only your billing and customer service details will change.
6. Final Steps with Your Old Supplier
After the switch, your old supplier will send you a final bill based on your last meter reading. If you have overpaid, you can claim back credit. Suppliers are required by Ofgem to return any credit within 10 working days of producing your final bill.
Key Legal Protections
Ofgem, the UK energy regulator, ensures that all domestic energy customers have the right to switch without penalty in the last 49 days of their contract.
Your energy supply must not be interrupted during a switch.
Suppliers must refund any credit on your account promptly after you leave.
Switching energy tariffs or suppliers is straightforward if you follow these steps. Always read the terms carefully and keep records of your communications. For more detailed advice, visit our page on switching energy supplier.
Consumer Protections When Choosing an Energy Tariff
When choosing a new gas or electricity tariff in the UK, it’s important to know that you have strong consumer protections in place. UK energy law ensures that you can make informed choices, avoid unfair treatment, and get support if things go wrong.
Your Rights Under UK Energy Law
The Energy Act 2013 sets out key protections for energy consumers. This law requires suppliers to treat customers fairly, provide clear information, and avoid any unfair contract terms. It also gives you the right to switch suppliers without facing unnecessary barriers or hidden charges.
Energy suppliers must be transparent about their tariffs, including prices, contract length, and any exit fees. They are also required to provide you with accurate and timely bills, and to clearly explain any changes to your tariff or terms.
Protection Against Unfair Charges and Misleading Offers
Suppliers are not allowed to mislead you with unclear pricing or false offers. All tariffs and promotions must be presented honestly, so you can compare them easily. If you use price comparison websites, look for those that follow Ofgem’s Confidence Code. This code sets high standards for accuracy, transparency, and impartiality, helping you find the best deal with confidence.
You should never be charged hidden fees, and any early exit fees must be clearly stated before you sign up. If you feel you’ve been misled or unfairly charged, you have the right to challenge your supplier and seek redress.
Checking If Your Supplier Is Licensed and Regulated
All energy suppliers in the UK must be licensed and regulated by Ofgem, the energy regulator. This means they must follow strict rules to protect customers. Before signing up with a new supplier, you can check their credentials on Ofgem’s website or ask the supplier directly for proof of their licence. This helps ensure you are dealing with a reputable company that is accountable for its service.
Getting Help If You Have Problems
If you experience issues with your tariff, such as unexpected charges, poor service, or difficulty switching, there are steps you can take. Start by contacting your supplier to explain the problem. If you’re not satisfied with their response, our page on problems with your energy supply or supplier offers practical advice on what to do next.
Should you need to escalate the issue, you have the right to complain about an energy company. This process is designed to ensure your complaint is taken seriously and resolved fairly, with the support of independent bodies if necessary.
By understanding your rights and the protections in place, you can choose your energy tariff with greater confidence and peace of mind.
Managing Your Energy Tariff When Moving Home
When you move home, managing your energy tariff properly helps you avoid unexpected charges, supply interruptions, or being placed on a more expensive tariff. Here’s what you need to know and the steps you should follow:
1. Notify Your Current Supplier
As soon as you know your moving date, contact your current energy supplier. Let them know when you’ll be leaving your old property and provide a final meter reading on your last day. This ensures you’re only billed for the energy you’ve actually used. If you’re on a fixed-term contract, check whether there are any exit fees for leaving early – some suppliers waive these if you’re moving.
2. Set Up Supply at Your New Address
Before you move in, find out which supplier currently provides energy at your new home. You can do this by asking the previous occupants, your landlord, or the letting agent. On move-in day, take meter readings immediately and contact the existing supplier to register as the new account holder. This helps prevent you from being charged for energy used before your arrival and avoids any risk of disconnection.
For more on managing these steps and ensuring a smooth transition, see our guide to moving home energy supply considerations.
3. Review Your New Tariff Options
When you move, your existing tariff usually can’t be transferred to your new address automatically. Instead, you’ll often be placed on a “deemed contract” or standard variable tariff with the current supplier at your new home. These tariffs are typically more expensive, so it’s important to shop around and compare deals as soon as possible. You have the right to switch to a new tariff or supplier without penalty once you’ve moved in.
4. Avoid Supply Interruptions
To make sure your energy supply isn’t disrupted during your move:
Give both your old and new suppliers plenty of notice.
Provide accurate meter readings at both properties.
Settle any outstanding bills at your old address.
Register promptly with the supplier at your new home.
By following these steps, you’ll minimise the risk of being left without gas or electricity during your move.
5. Know Your Rights and Supplier Obligations
Energy suppliers in the UK must follow rules set out by Ofgem, the energy regulator. These include requirements around contract terms, billing, and the process for moving home. You can find out more about these requirements in the Supply License Conditions, which outline what suppliers must do when customers move.
If you have concerns about unfair charges or your rights during a move, it’s worth reviewing these conditions or contacting your supplier directly for clarification.
By taking these steps and understanding your rights, you can manage your energy tariff effectively when moving home, avoid unnecessary costs, and ensure your new property is ready for you from day one.
Special Considerations for Small Businesses
When it comes to choosing an energy tariff, small businesses in the UK face some unique considerations compared to domestic customers. Understanding these differences is essential to ensure you get the best deal and meet your legal obligations.
How Business Energy Tariffs Differ
Unlike households, small businesses typically have access to a wider range of energy tariffs designed specifically for commercial needs. These tariffs may offer fixed or variable rates, and the contract terms can be longer – often lasting one, two, or even three years. Unlike domestic energy contracts, there is usually no cooling-off period once a business energy contract is signed, making it important to review all terms carefully before committing.
Suppliers may also use different pricing structures for business customers, such as charging based on estimated or actual usage, and may require you to provide regular meter readings.
Your Rights and Responsibilities
Small business energy customers have specific rights under UK law, but these can differ from those of domestic users. For example, you are entitled to clear information about your contract, including prices, duration, and any exit fees. Suppliers must also provide notice before your contract ends, giving you time to compare offers or negotiate a new deal.
However, as a business customer, you are generally expected to be more proactive in managing your contract. This includes monitoring renewal dates, understanding your consumption, and negotiating with suppliers. If you do not actively switch or renegotiate, your contract may automatically roll over, sometimes at less competitive rates.
The Small Business, Enterprise and Employment Act 2015 sets out important protections and obligations for small businesses, including access to finance and fair treatment by suppliers. Familiarising yourself with this legislation can help you understand your rights when dealing with energy contracts.
Where to Find Tailored Advice
Navigating energy tariffs as a small business can be complex, but there is help available. For more detailed guidance on your rights, responsibilities, and practical steps you can take, visit our dedicated page on energy issues for small businesses. This resource provides up-to-date advice on contract terms, dispute resolution, and how to avoid common pitfalls when choosing or switching suppliers.
Taking the time to understand your options and legal protections can help your business avoid unexpected costs and ensure you get the most value from your energy supplier.
Additional Support and Resources for Energy Consumers
When choosing an energy tariff, it’s important to know that support is available if you need help managing your energy bills or understanding your options. Here’s how you can access extra support, find financial help, and get advice on saving energy and resolving common issues.
Support If You’re Struggling to Pay
If you’re struggling to pay your energy bills, you’re not alone. Energy suppliers in the UK are legally required to offer support if you’re having trouble paying. This may include setting up an affordable payment plan, giving you more time to pay, or offering advice on reducing your usage. Suppliers must follow rules set by Ofgem, the energy regulator, which protect you from being disconnected without proper notice and ensure you’re treated fairly.
Financial Help: Grants and Benefits
There are several types of financial help available to ease the pressure of rising energy costs. You may be eligible for grants and benefits to help you pay your energy bills, including the Warm Home Discount, Winter Fuel Payment, or Cold Weather Payment. Some energy suppliers also offer their own grants if you’re behind on payments. For a summary of the different options and how to apply, visit get help with your energy bills.
Tips and Advice to Cut Your Bills
Making your home more energy efficient can help you save money in the long run, no matter which tariff you choose. For expert guidance, see cut your UK energy bills for practical tips, government grants, and support schemes. You’ll also find straightforward advice on how to save energy at home, such as switching off appliances, using energy-efficient bulbs, and improving insulation. For quick wins, check out the simplest ways to save energy that you can start using today.
Dealing with Billing or Meter Problems
If you notice mistakes on your bill or have trouble understanding charges, suppliers must help you resolve these issues. You have the right to clear, accurate bills and to challenge any errors. For guidance on what to do if you have problems with your energy bill, including how to raise a complaint, visit the linked resource. If you think there’s an issue with your meter – such as incorrect readings or a faulty device – see the advice on issues with your energy meter for steps to take and your rights to a free meter check if needed.
Knowing your rights and where to find support can make managing your energy bills much less stressful. Whether you need financial help, want to cut your costs, or have concerns about your bill or meter, there are resources and legal protections in place to help you.
Knowing Your Current Energy Supplier
Before you can choose a new energy tariff or switch suppliers, it’s vital to know who currently provides your gas and electricity. This information is the foundation for comparing deals, understanding your contract terms, and ensuring a smooth switching process.
Why Knowing Your Supplier Matters
Your current supplier is the company responsible for billing you and managing your energy account. Knowing who supplies your gas or electricity is important because:
Contract Terms: Your existing contract may have details about exit fees, notice periods, or fixed rates that affect your ability to switch or negotiate a better deal.
Accurate Comparisons: To compare tariffs effectively, you’ll need information about your current usage, meter type, and tariff details – all of which are linked to your present supplier.
Switching Process: When you decide to switch, your new supplier will need details about your current provider to ensure a seamless transition and avoid any disruption to your service.
How to Find Out Who Your Supplier Is
If you’re unsure who your energy supplier is – perhaps you’ve just moved home or lost track of your paperwork – there are simple steps you can take. You can find out who your gas or electricity supplier is by following official guidance. This usually involves checking recent bills, contacting your local network operator, or using online services designed to help consumers identify their suppliers.
Using This Knowledge to Compare and Switch
Once you know your current supplier, you can:
Gather Accurate Information: Collect details like your current tariff name, unit rates, and annual usage, which are often needed for comparison tools.
Check for Exit Fees: Review your contract for any charges or restrictions that might apply if you switch before the end of a fixed-term deal.
Avoid Overlapping Payments: Informing both your old and new suppliers during a switch helps prevent double billing or service interruptions.
Understanding your current energy arrangement empowers you to make informed decisions, avoid unexpected charges, and take advantage of your rights as a consumer under the Gas Act 1986 and the Electricity Act 1989, as well as Ofgem’s consumer protection rules. This is the first step towards finding a tariff that suits your needs and budget.
