When looking for the cheapest energy deals it helps to understand the different types of packages that most suppliers offer. Every supplier will have a ‘standard’ tariff, but this is usually less economical than if you opted for one of their other packages. But should you go for a fixed energy tariff or dual fuel? And what’s a ‘green’ tariff? Here we’ll briefly give you the lowdown on what energy tariffs are out there.
Every supplier will have a standard tariff (sometimes called an ‘evergreen’ tariff). This is the default rate for energy that a supplier will charge you when you first move into a new household, and the prices will fluctuate with the markets.
Pros: Great if you need a flexible tariff and don’t want to be tied into a contract, as all standard tariffs carry no minimum contract and no exit fee.
Cons: Almost always not the cheapest energy deal you can get from a supplier. Price will change with the energy market’s cost of fuel, so can be hard to predict how your bills will turn out long-term.
Fixed energy tariff
A fixed energy tariff quite simple charges a set rate for per unit of fuel until a particular date (determined in advance).
Pros: Usually cheaper than a standard tariff, and guaranteed fixed prices help you budget your energy costs long-term.
Cons: You’ll have to factor in exit-fees if you ever decide to leave this tariff before the end-date, though new Ofgem regulations allow you to switch tariffs 42-49 days before your contract end-date without incurring a fee. Also bear in mind that as you are on a fixed rate, you won’t benefit from any potential price cuts – you will simply be charged a guaranteed rate per unit of energy consumed.
Dual fuel tariff
Often it can be much easier (and cheaper!) to have just one energy company supply both your gas and electricity. That’s exactly what a dual fuel tariff is: one company supplying you with both.
Pros: Great if you want the convenience of only having one company to deal with, and you’ll almost always get some form of discount for having both gas and electricity supplied from the same firm.
Cons: You’ll have to do some research and a bit of maths, because sometimes the discounts for a dual fuel tariff don’t always add up to a cheaper overall bill than if you’d taken out two different contracts with different suppliers for each one. Also, you’ll probably be charged an exit-fee for leaving this tariff, so factor that in before switching.
Online energy tariff
By managing your account online and putting a little extra time and effort into taking and submitting meter readings yourself, you can bag yourself a discount on your gas and electricity.
Pros: This tariff is great if you’re after a cheap tariff, are computer-savvy, and don’t mind putting in a bit of time into managing it all online. You’ll be required to submit readings online yourself, and you’ll be sent paperless bill via email or on your supplier’s web portal.
Cons: If you prefer to be sent everything printed on paper and via post then an online tariff probably isn’t for you. Even more so if you’re busy and don’t have the time to take readings and submit them. As always, exit-fees usually apply so bear these in mind when signing up.
You can pre-pay for your gas and electricity and top-up your meter just like you’d top up credit on a pay-as-you-go phone.
Pros: This option is ideal for people who want a better way to manage their finances and really take control of the amount of energy they are using.
Cons: It’s expensive. Pre-paid tariffs are some of the most expensive you can find, so you’ll be losing out on savings. Sometimes you will be charged an exit-fee, but each supplier is different and it all depends on how much debt is on your meter.
There are various kinds of green tariff, usually involving your supplier either matching your usage with generation from renewable energy sources, or offsetting your energy usage.
Pros: If you want to do your bit for the planet they’re a great way to make a difference.
Cons: Green tariffs are usually more expensive (but not always), and you’ll have to watch out for exit-fees as with many other tariffs.
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