How to choose the right energy tariff

Finding the right gas and electricity deal could save you hundreds of pounds a year on your energy bills. Here is what you need to know about choosing the right energy tariff.

Share this guide
Middle aged couple choosing energy supplier

Last updated: 26 February 2021

In this guide:

  • Can I switch energy tariffs?

  • Which energy tariff should I get?

  • How should I pay for my energy?

Can I switch energy tariffs?

Yes, you can ask your supplier to move you to a cheaper tariff if you think you could reduce your energy bills. You could potentially save hundreds of pounds by switching to a different tariff or supplier.

The quickest and easiest way to switch your energy is online. Our energy comparison is powered by Uswitch, and lets you choose from a range of tariffs available in your region.

Just enter your postcode and your current energy usage and pick the cheapest suitable tariff. Read our guide on how to switch energy supplier for more information.

What about if you’re on a fixed tariff? You may have to pay an exit fee, which can cost around £30 per fuel if you’re more than 42-49 days away from the end of the tariff. Find out more with our guide to choosing the right energy tariff.

Which energy tariff should I get?

When choosing an energy deal, there are four principal things to consider:

  • The price of energy.

  • How flexible does your contract need to be?

  • Do you wish to combine your gas and electricity services with one bill?

  • Are you looking for green or renewable energy sources?

Our comparison site helps you shop around and find the best energy tariff to suit you. Some companies may not supply your area, so use our postcode checker to see what’s available where you live.

Energy providers offer different types of tariffs. Think about how much you want to pay and how flexible you need your contract to be. You can choose from the following types of deal:

Fixed energy tariffs

This is often the cheapest energy tariff because the price is fixed at the start of your contract and remains at an agreed figure until the contract ends, which is typically after one or two years. There are two different types of fixed energy deal:

  • Prices are fixed for the length of the contract.

  • Prices are fixed at different rates for different stages of the contract.

Your bills could still increase based on how much gas or electricity you use, but the set rate remains the same for the duration of your contract. This also means that if energy prices fall, your rate won’t be reduced.

Fixed energy deals can save you money, but many will charge you an exit fee if you wish to leave the tariff more than 42 days before the end of your contract.

Standard variable energy tariffs

Did you know? Your energy company must give you 30 days' notice if the price of your energy is going up.

This tariff type – also often referred to simply as a ‘standard tariff’ – is the default option offered by most energy companies and its principal characteristic is that the price you pay for your energy isn’t fixed.

A variable tariff is a good option if you want flexibility, because you’re free to switch to another tariff or supplier without charge whenever you want. However, an increasing number of fixed-rate tariffs come with no exit fees attached, so you can still shop around for potentially better deals. 

However, variable tariffs are often more expensive than fixed-rate ones, and the price could change at any time.

Dual fuel energy tariffs

Virtually all suppliers will offer dual-fuel packages – these combine your gas and electricity services into a single package, which could save you money on your energy bills.

You receive a single bill for both gas and electricity, and you’ll typically make a single payment each month to cover both services. Your supplier will almost certainly reward you in the form of a discount on your bill if you allow it to supply you with both fuels within a single tariff (note, you’ll be charged separate, fixed unit rates for your gas and electricity.

You can still choose between fixed, standard, and online tariffs, and you can compare dual fuel energy deals here.

Time of use

These plans, also known as multi-rate tariffs, include Economy 7 and Economy 10 tariffs. They work by charging lower rates for your electricity at certain times of day, typically between midnight and 7am.

This could save you money if you use most of your energy during off-peak hours, but rates during the day are usually higher than for regular tariffs. This means you could ultimately pay more if you don’t shift your energy usage to these lower-rate periods.

Time-of-use tariffs require you to have a new specialist meter installed in your home, because you need to provide two different readings depending on the time of day the energy was used.

To take full advantage of multi-rate tariffs, you should fit a hot water cylinder to provide a store of water heated up overnight for use during the day. This could cost around £2,500.

Green energy tariffs

Green energy tariffs use more renewable energy than standard gas or electricity. They’ve traditionally been more expensive than other energy tariffs, but increasing popularity combined with new sources of renewable energy coming on-stream make them more competitive than ever, and even the big six energy suppliers are now offering renewable electricity as standard with certain packages (typically fixed-rate ones). In addition, some smaller suppliers offer cheap green energy, and you could also get help with grants and schemes if you generate your own renewable energy.

Online

This type of tariff is administered completely online, which means the following are all managed via an online account or by email:

You could save money with an online tariff because the supplier charges you less for managing the account yourself. However, you should check your emails for important information as you won’t receive bills, reminders, or other notifications by post.

Prepayment energy tariffs

This tariff requires you to top up your energy using a prepayment meter, so you pay for your energy in advance and avoid being tied to a monthly or quarterly bill.

Paying for your energy as you go is a good way to make sure you only pay for what you need, but gas and electricity is more expensive with a prepayment meter.

Business energy tariffs

If you run a business, you may need to look at getting a business energy tariff.

It works the same way as your domestic energy plan but is designed for commercial properties that use higher volumes of gas and electricity.

This means you can fix your contract for longer, and that the price of your energy is more cost-effective overall.

How should I pay for my energy?

How you pay for your gas and electricity also affects how much your energy costs. Unless you choose a prepayment meter, there are several ways to pay:

  • Monthly direct debit: This is often the cheapest way to pay for your energy, as suppliers tend to offer a discount for direct debits. Your monthly payments will be calculated according to an estimate of your annual usage based on previous consumption, so you should check your bills to avoid underpaying or overpaying.

  • Quarterly: You can pay your energy bills by BACS transfer, cheque, or quarterly direct debit. This translates to a single payment every three months to cover the amount listed on your most recent bill. You’ll need to make sure you’ve saved enough money to cover the cost each time a bill arrives, which will be roughly the equivalent of three monthly payments by direct debit.

  • Payment card: This lets you make regular payments for your gas and electricity with a debit or credit card. You can pay weekly, fortnightly, or monthly by going to a PayPoint shop or local Post Office.

Choose the payment option that’s easiest for you to manage as well as the most affordable. If you’re having trouble paying your energy bills, read our guide to find out how you can get help.