When household budgets are being stretched by the rising cost of living, finding ways to reduce your monthly outgoings is a top priority. It’s only natural to look around at what other energy suppliers are offering to see if you can save some £££s, but energy tariffs can be quite confusing.
The energy market is full of jargon, shifting prices and deals that may appear better than they actually are. You may spot an energy deal that looks cheaper than your current tariff, but that doesn’t always mean you’ll pay less overall once you look at the full picture.
Understanding exactly what you’re paying for is the most important thing you can do to protect your household budget. In this guide, we’ll remove the jargon and show you how to compare energy tariffs properly, so you can make a confident, informed decision.
Looking beyond the headline price
When you’re looking to switch, you may have seen energy suppliers often lead with one appealing figure – whether that’s a lower monthly payment, a cheaper fixed rate, or a headline saving. It’s easy to see a low monthly price and assume you’ve found a bargain. But your actual costs depend on several factors.
Put simply, not all energy prices are like-for-like. When comparing energy tariffs, looking beyond the headline figure helps you make a more informed decision about what’s right for your home and your budget. Your actual costs will always be shaped by:
- Your actual energy usage: how much gas and electricity your household uses.
- Unit Rates and Standing Charges: the prices you pay for your energy and your connection to the grid.
- Tariff type: how the specific tariff is set up.
- Exit fees: charges you may face if you leave a contract early.
- Short-lived discounts or joining incentives: perks that look great at the start but may not last.
A deal may look attractive at first, but the details matter. A temporary discount may expire and an appealing fixed tariff may include an exit fee that makes it harder to switch. It’s important to compare everything.
Plus, the initial quote you see may be an estimate based on the assumption that you’ll use less energy than you really need. If your actual usage is higher, your payments may later need to increase to cover the difference.
What makes up your energy bill?
To properly compare energy tariffs, you need to understand the two main building blocks of an energy bill: the Unit Rate and the Standing Charge, and how they’re calculated.
The Unit Rate
Your Unit Rate is the amount you pay for the gas or electricity you actually use. It’s measured in kilowatt-hours (kWh). A kilowatt-hour is simply a way of measuring energy. For example, using a 1000-watt (1kW) microwave for one hour uses one kilowatt-hour (1kWh) of energy.
When you compare energy prices, the Unit Rate is one of the key figures to understand and compare. The lower the Unit Rate, the less you’ll pay for the energy you use day-to-day.
Depending on the tariff, there may be one Unit Rate, multiple Unit Rates, and time-specific rates like a Night Rate, all of which should be compared.
The Standing Charge
The Standing Charge is a fixed daily amount you may pay to stay connected to the energy network. You pay this whether you use energy that day or not. It covers things like maintaining the energy network and other industry costs.
Standing Charges can vary between suppliers and tariffs, and a supplier might offer a low Unit Rate, but balance that out with a higher Standing Charge.
You may have seen the Government recently announced that fixed daily Standing Charges on gas will be scrapped. It’s not confirmed when, but it won’t be until late 2027 at the earliest.
But at Utilita, our Pay As You Go tariffs are already free of Standing Charges – covering both gas and electricity. If you don’t use any energy, you won’t be charged. That gives you more control over your spending, especially in warmer months when your heating is off.
The Ofgem Energy Price Cap
You’ll hear a lot about the Ofgem Energy Price Cap. Ofgem is the independent energy regulator for Great Britain – and the price cap limits the maximum rates all suppliers can charge for each unit of gas and electricity, and the daily Standing Charge, on standard variable tariffs.
It doesn’t cap your total bill. If you use more energy, you’ll pay more. What it does, is limit the rates and charges applied to those tariffs.
For a full breakdown of the Energy Price Cap (what it means, and what it doesn’t), check out our other dedicated blog.
What are the different types of energy tariffs?
When considering your options, it’s useful to understand the ways energy tariffs can be structured because different households need different setups.
Some tariffs differ by how prices are set, while others differ by how you pay for your energy or when you use it. Here are some of the useful things to consider:
Pricing type
Some tariffs are variable (they change in line with Ofgem’s Energy Price Cap), while others are fixed, so your rates remain the same over a set period. For a full breakdown of the pros and cons of fixed and variable tariffs, take a look at our dedicated blog.
Standard Variable Tariff (SVT): A standard variable tariff means your Unit Rates and Standing Charges change over time. These rates are protected by Ofgem’s Energy Price Cap, which limits the maximum suppliers can charge.
Fixed Rate Tariff: A fixed tariff keeps your Unit Rates and Standing Charges the same for a set period, often 12 or 24 months. It may also come with exit fees, so it’s worth checking the terms carefully before you switch.
Payment method
The main ways to pay for your energy are Pay As You Go (paying for your energy before you use it) and Credit (paying for your energy after you use it, either by Direct Debit or on receipt of a bill). We specialise in Pay As You Go tariffs – if you want to hear more about the misconceptions some people have about the payment method, check out our latest blog here.
Prepayment Tariff (Pay As You Go): With a Pay As You Go (PAYG) tariff, you pay for your energy before you use it by topping-up your meter. Modern smart meters and apps like My Utilita make topping-up much easier than it used to be, and now many customers are actively choosing Smart PAYG. Not just because of the convenience, but because of the control it gives them over their spending and weekly budgets.
Credit tariffs: With a credit tariff, you use your energy first and pay for it afterwards, usually by monthly Direct Debit or on receipt of a bill. Your payments may be based on estimated usage and reviewed regularly.
Usage based tariffs
Some tariffs may have different rates depending on when you use energy – you can learn more about the different tariff types we offer by heading to our website.
Time-of-use tariffs: These tariffs charge different Unit Rates depending on the time of day you use energy. For example, our Smart Economy 7 tariff has cheaper rates during the night compared to daytime rates. Some newer smart tariffs also offer lower rates during specific off-peak hours, which may suit households that can shift when they use energy.
Staying in control (because energy isn’t just about the tariff)
Finding the right energy tariff for your circumstances isn’t just about price, having control over your usage and understanding your spending plays a big part too.
We’re committed to giving customers the tools, technology and support they need to get the best out of their tariff, and that’s where smart technology comes in. A smart meter means no more crawling into dark cupboards to take manual readings. It helps you keep track of what you’re using in near real time, and turns PAYG into a convenient payment where you can top-up anytime, anywhere.
Our My Utilita app takes that one step further and puts energy back in your hands. In our app, you can see exactly what you’re spending, access personalised energy-saving tips, and use handy features that make paying for your energy a little easier.
Knowledge is power. When you can see what’s using the most energy at home, it becomes much easier to make small changes that add up and make a big difference over time.
How to compare energy tariffs properly: A step-by-step guide
Taking into account everything we’ve explained so far, here’s a guide of exactly what to look for when comparing energy tariffs – it’s simpler than it sounds!
Step 1: Check your current tariff details
To give you a baseline to compare against, note down these three things. You can’t tell whether a new deal is better unless you know what you’re paying now.
- The name of your current tariff.
- Your current Unit Rates for gas and electricity.
- Your current Standing Charges.
Step 2: Compare more than the headline figure
When you use a supplier website or comparison tool, don’t stop at the estimated monthly cost. Look deeper. Check the Unit Rates and Standing Charges being offered and compare them with your current tariff (for example, some tariffs like ours won’t include a Standing Charge, and instead charge a slightly increased first Unit Rate). That’s where the real picture starts to show.
Step 3: Check for exit fees and perks
Before you switch, check the small print for exit fees and look closely at any perks or discounts that may expire quickly.
A tariff might look cheap because it includes a welcome credit or short-term offer. Once that’s gone, the overall value may look very different. Compare the full costs and terms, not just the appealing part.
Step 4: Research customer service and trust
Price matters, but it isn’t everything. When you need help, you want a supplier that’s easy to reach and straightforward to deal with. Before switching, check customer reviews and ratings. A slightly cheaper tariff may not feel like much of a win if the support is poor when you need it most.
We’re rated excellent on Trustpilot, with more than 100,000 reviews. Plus, we’re one of the only energy suppliers you can talk to face-to-face, with 12 high-street Energy Hubs across the UK. We’ll support you however you need – in-person, over the phone, online – whatever works for you.
What next?
Comparing tariffs can be a useful way to find value. But when doing so, it’s important to look beyond headline figures and compare the full costs and terms.
Understanding exactly what to look for, and what’s right for you, is the key to avoiding a deal that looks good at first glance but doesn’t provide the value you expect.
We’re on a mission to help shine a light on the reality of energy prices, so look out for our other price-related blogs on the Energy Price Cap (what it does, and doesn’t do), and the differences between fixed and variable tariffs.
Frequently asked questions on switching energy suppliers
When you’ve found the right tariff, the switching process is usually straightforward. Here are some common questions we hear from customers.
How long does it take to switch energy supplier?
Under current industry rules, your switch can be completed within five working days. You also get a 14-day cooling-off period after you agree the contract, so unless you ask your new supplier to start sooner, the switch happens once that period ends. Your supply won’t be interrupted during the switch – the energy keeps flowing, and only the company billing you changes. Here’s more information on switching to Utilita.
Do I have to pay to switch energy supplier?
No, switching supplier is free. Your new supplier won’t charge you to join them. However, your current supplier may charge an exit fee if you leave a contract early, so always check first. Utilita’s Pay As You Go tariffs don’t include any exit fees.
Can I change energy supplier if I have a prepayment (Pay As You Go) meter?
Yes. Having a Pay As You Go meter doesn’t stop you from comparing prices and switching suppliers. Utilita specialises in Pay As You Go energy.
However, if you owe your current supplier more than £500 for gas or for electricity, they can stop the switch until you’ve reduced the debt. Smaller debts can move to your new supplier.
When shouldn’t I switch energy?
There are a few situations where it may be worth pausing before you switch.
If you’re moving in, or moving out of your house soon, it can be easier to wait until you’re settled in the new property. If you’re currently on a fixed tariff, make sure any exit fees don’t outweigh the potential savings from switching.