Choosing your energy tariff

This advice applies to Scotland. See advice for See advice for England, See advice for Northern Ireland, See advice for Wales

An energy tariff is a plan for how much you’ll pay for your gas or electricity.

A tariff includes the rate you’ll pay for the gas or electricity you use and a daily fee called a ‘standing charge’. You’ll pay this no matter how much energy you use.

There are 2 main types of tariffs:

  • standard variable tariff - your rate goes up and down with the price of energy

  • fixed tariff - your rate stays the same for the length of your contract

There are different kinds of energy tariffs to choose from - you can use most of them with gas and electricity. To work out the best one for you, think about your budget, type of meter and any specific needs you have, for example, if you need more energy at night.

If you’re not sure what gas or electricity tariff you’re on now, contact your supplier or log in to your online account to check. 

Fixed tariff

A fixed tariff charges you the same rate for your gas or electricity and your standing charge, until your contract ends. 

If the wholesale price of energy changes, you’ll still pay the rate you agreed on your contract. This means if the price of energy goes down, you could end up paying more than you need to.

If you need to know what rate you’ll be paying so you can budget, you might consider choosing a fixed tariff. 

A fixed tariff usually lasts 12 months, although you can sometimes fix for longer.

You can switch your tariff before it ends. If you have 49 days or less left on a fixed tariff, you can switch for free. If you have 50 days or more left on your fixed tariff you might have to pay an 'exit fee' if you want to switch.

Example

Jordy is on a fixed tariff for their electricity. On their tariff they pay:

  • 28p per kWh of electricity

  • 36p per day for the standing charge

The wholesale price of energy drops. The amount Jordy pays for their electricity and their standing charge doesn’t change.

The more electricity Jordy uses, the more expensive their bills will be.

Standard variable tariff

A standard variable tariff is sometimes called a ‘default tariff’.

On a standard variable tariff, the price of energy usually changes every 3 months. The price is reviewed in January, April, July and October. 

If the price of gas or electricity goes up, so will the rate you pay for the energy you use. This makes budgeting and planning harder.

Your supplier will contact you if your rate changes - they might send a letter or email. 

Suppliers can charge different rates for their standard variable tariff, so it’s worth comparing suppliers. 

Example

Nkem is on a standard variable tariff for her electricity. On her tariff she pays:

  • 30p per kWh of electricity

  • 58p per day for the daily standing charge

The cost of energy goes up, Nkem’s supplier contacts her to tell her that her standard variable tariff will change to:

  • 31p per kWh of electricity

  • 59p per day for the standing charge

This change means Nkem’s average bill will go up.

The more energy Nkem uses, the more expensive her bill will be. 

Find the best tariff for you

You can choose different kinds of standard variable or fixed tariffs, for example Economy 7 or a green tariff.

Press the heading to open more information about the tariff. 

If you have a prepayment meter

If you have a prepayment meter or a smart-meter in prepayment mode, you’ll need to use a prepayment tariff.

On a prepayment tariff you’ll pay for your energy before you use it, sometimes called ‘pay as you go’ (PAYG). If you’re thinking about moving to prepayment you can check if prepayment will be right for you.

You can get different types of prepayment tariffs, for example:

  • standard variable prepayment tariff

  • fixed prepayment tariff

  • ‘green’ prepayment tariff

If you don’t have a smart meter and want to switch suppliers, your new supplier might ask you to have a smart meter installed in prepayment mode, before they’ll let you switch.

You might find fixed prepayment tariffs are more expensive than other tariffs.

If you don’t owe money to your energy supplier, you could save money switching from prepayment to a credit tariff, where you pay for your energy after you use it. Check how to switch from prepayment to a credit meter.

If you want one bill for your energy

You could consider a dual fuel tariff. To use this tariff you must use both gas and electricity.

A dual fuel tariff is when you get your gas and electricity from the same supplier - you’ll only get one bill.

You can get different types of dual fuel tariffs, for example:

  • fixed rate dual fuel tariff

  • standard variable dual fuel tariff

  • green dual fuel tariff

You can sometimes get good deals on dual fuel tariffs because you’ll be getting both your gas and electricity from the same supplier. If you’re looking for a dual fuel tariff you can usually choose that option on price comparison websites.

On a dual fuel tariff you’ll have one point of contact for both your gas and electricity. This could make it easier to sort any problems with your supplier.

If you’re unhappy with your supplier it will mean you’ll need to switch both your gas and electricity.

If you want an environmentally friendly tariff

You could consider a green tariff.

Generally green tariffs are more expensive as it costs more to supply renewable energy. 

You can get different type of green tariffs, for example:

  • green standard variable tariff

  • green fixed prepayment tariff

  • green prepayment tariff

There isn’t a limit on what you can be charged on a green standard variable tariff. If your rate changes and it’s too high, you can leave your standard variable tariff at any time.

If you want a green tariff which uses 100% renewable energy, for example from wind or solar, you should check the wording of the contract carefully.

Some ‘green’ or ‘renewable’ tariffs might not contain any or all renewable energy. Instead, some suppliers say money from the tariff will be invested in renewable energy sources.

If you generate spare renewable energy

You can also get a separate tariff to sell your spare energy to a supplier. This is called a Smart Export Guarantee (SEG) tariff. 

SEG is a government backed scheme which pays you for your spare energy, it replaces the Feed-in Tariff (FiT). 

The tariff works in a similar way to an energy tariff, but you’ll be paid money instead of paying the supplier.

You’ll need to have a smart meter and you can choose between a standard variable or fixed tariff.

The renewable energy you sell to suppliers could come from:

  • solar photovoltaic (PV) - these panels are often on roofs and they convert the sun’s energy into electricity

  • wind - onshore wind generated from wind turbines

  • hydro - power generated from rivers or streams

  • anaerobic digestion (AD) - a biogas produced when organic waste breaks down

  • micro combined heat and power (Micro-CHP) - a boiler which generates heat and electricity at the same time

To be eligible for the tariff your energy installation must have a capacity of less than:

  • 5 megawatts for Solar PV, wind, hydro and AD

  • 50 kilowatts for Micro-CHP

How much money you’ll get depends on your tariff and how much spare energy you sell to suppliers.

If you have an energy supplier, you can get a SEG tariff with a different supplier. You can find a list of energy suppliers who offer SEG tariffs on Ofgem's website.

If you want to reduce your standing charge 

You’re usually charged a daily fee by your energy supplier for being connected to the gas grid or electricity network - this is called a standing charge. 

You might get a cheaper standing charge from a different supplier, but it won’t change much. This is because how much you’ll pay for your standing charge depends on your postcode and who your network operator is. Your network operator is the company who looks after the pipes and cables in your area.

If your network operator works across a rural area, you’ll likely pay a higher standing charge than average. This is because it costs more to get gas and electricity to rural homes.

If you’re paying a high standing charge, it’s worth comparing different tariffs from different suppliers. The amount you pay for your standing charge might be different if you’re on a fixed or standard variable tariff.

If you’re on a standard variable tariff, your standing charge can change with the cost of energy - it could go up or down. 

If you can’t find the standing charge on your tariff, check if the supplier is charging 2 rates for energy. They might charge a higher rate for the first lot of energy you use, this includes your standing charge, and a cheaper rate for any energy you use after that. 

If you choose a fixed tariff and the cost of energy and the standing charge changes, you’ll continue to pay the same amount agreed on your contract.

If you want to switch energy suppliers or tariffs

You might be able to save money by switching energy suppliers or tariffs. ​​Check how to switch energy suppliers. 

Further help

If you’re struggling to pay your energy bills or top up your prepayment meter you might be able to get extra help. Check if you can get grants and benefits to help pay your energy bills.

If you’re struggling with living costs

If you’re struggling with money, there are things you can do to save on your regular living costs. Check what to do if you need help with living costs.

If you’re finding it hard to pay your bills, you can get help. Find out more about getting help with your bills.

You can also get help with debts.

If you're struggling to pay for food, find out how to get help from a food bank.

If you’re finding things difficult

Your mental health is as important as your physical health. You should talk to your GP if your money problems are affecting your mental health. 

You can also get help on the Breathing Space website.

If you need to speak to someone right now you can call the Samaritans for free.

Samaritans

Helpline: 116 123 (Monday to Sunday at any time)

Welsh Language Line: 0808 164 0123 (Monday to Sunday 7pm to 11pm)

Shout

You can also text 'SHOUT' to 85258 to start a conversation with a trained Shout 85258 volunteer. Texts are free, anonymous and confidential from anywhere in the UK.

If you think it's an emergency

If you need support you can call NHS 24 on 111, the Mental Health Hub is open 24/7.

Call 999 if you think you need an emergency ambulance.

Page last reviewed on 24 August 2023