All About Tariffs
What is a Tariff
A tariff is simply the money rate for which you pay for your gas
and electricity.
Many suppliers also have special tariffs and reward
schemes. For example, just by changing from paying
quarterly by cash or cheque to paying by direct debit with an
online tariff you may be to get discount of up to 15% all without
having to change to a different supplier.
There are a variety of different tariffs to choose from.
Types of Tariff
Prepayment
These tariffs are for people with prepayment meters
Social
A social tariff is a tariff offered by suppliers to vulnerable
and fuel poor customers who struggle most to pay their energy bills
and is as good as the lowest tariff they offer to customers in that
area, including online deals. This means that such
customers will be assured of being on the best deal their supplier
offers in their area.
Online
These tariffs are usually the cheapest available and are growing
in popularity. Frequently these tariffs will require
you to manage your account online. Online account
management or paperless billing allows you to receive your energy
bills online instead of by post. You’ll be set up with
an online account access via your provider’s website and be
required to enter your own meter reading, usually every
quarter. You can also view a history of your bills to easily
keep track of your energy usage. Online account management doesn’t
prevent you from calling your energy supplier and discussing any
queries over the telephone nor does it require you to pay your
bills online.
Capped
Guarantees that the unit price (often called the kilowatt hour
price – kWh) of your electricity or gas will not rise beyond a
certain level (the “cap”) for a fixed period of time. The unit
price will normally always be higher than the supplier’s standard
tariff, but could decrease accordingly if its standard prices come
down during the period. There may be an “ exit fee “ to pay if you
choose to switch your supplier before the fixed period has expired,
so go through the terms and conditions of the offer carefully
before signing up.
Dual Fuel
By far the most popular choice of consumers and can be combined
with many other tariffs. Energy suppliers often offer a
discount to customers who decide to buy both gas and electricity
from the same supplier.
Economy 7
Is an electricity tariff most suitable for people who run
appliances, such as storage heaters and hot water at
night. You will pay less for the electricity you use
during the night than during the day. We estimate that
you need to use roughly 55% of your total electricity use between
1am and 8 am to make a saving.
Fixed
Similar to a capped tariff, but guarantees that your unit price
will not rise at all for a set period of time. However, as prices
are fixed or “frozen”, you wont’ benefit from any reduction in the
company’s standard prices during the period. These
tariffs may also involve an exit fee so check again before signing
up.
Green
Eco-conscious consumers can now choose electricity tariffs that
guarantee that each unit of electricity they use will be matched by
one purchased by their supplier from a renewable source, such as a
wind farm. Gas cannot be obtained from renewable sources but some
suppliers do offer tariff that offset the carbon produced when gas
is consumed. There are different types of green tariffs available
on the market today. Some invest in environmental projects other
than renewable generation for example, so make sure you know what
you‘re paying for.
Loyalty points
Certain suppliers will offer high street loyalty points such as
Argos, Air Miles, Tesco or Nectar points to their customers,
usually these points are offered on more expensive tariffs
Getting the best deal
Competition is all about customer power and the best way for gas
and electricity customers to exercise their influence by regularly
comparing prices and changing supplier if they’re not getting the
best deal or unhappy with customer service.