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Energy tariffs explained

Dual fuel tariffs

If you get your gas and electric from the same supplier, you are on a ‘dual fuel tariff’. It can often cost less to be with the one supplier for both, although we recommend you switch suppliers every year or at the end of every fixed term period to ensure you are getting the best value for money.

For advice on electric only tariffs, please click here.

Fixed Price Tariff

This type of tariff means you will pay a fixed price per unit for your energy, for a set period (usually 12 to 18 months). If you enter a fixed price tariff contract, you know that the prices will not increase over your set period and it is often cheaper than standard variable tariffs.

If you leave during the duration of your contract there may be an ‘exit fee’. If you leave at the end of your contract, you will not be charged and can shop around again for the best deal.

Remember it is the cost of each unit of energy that you use which is fixed, not the monthly price!

For example, you may have a set cost of 3p per Kilowatt of gas and 13p per Kilowatt of electric. This will be fixed for the duration of your contract. What is not ‘fixed’ is the monthly amount you will pay, if you are not paying enough to cover your usage. This means that if you start using more energy, your bill will increase.

For advice on ways to pay your energy bills, click here.

Fixed rate tariffs are designed to protect you from energy price rises. If you do not find another deal by the end of your contract, you will automatically be transferred onto a standard variable tariff.

Standard Variable Tariff

This means that you are not on a fixed price tariff and that the cost of your energy can change if the price of fuel increases or decreases. In Scotland, there is a price cap on energy for standard tariffs, if you pay by direct debit. This means that energy suppliers cannot charge you more than the capped amount.

Energy suppliers will use this as their default tariff. This means if you are on a fixed price tariff that ends, you will automatically be transferred to the standard variable tariff. This can often be more expensive, depending on the market.

For advice on different ways you can pay and manage your energy bills, please click here.