What is a standard variable tariff?
What is a standard variable rate energy tariff?
A standard variable rate tariff refers to an energy supplier’s basic, variable rate plan. This means your unit rate costs can go up or down at any time. Standard tariffs have historically been the most expensive options that suppliers offer.
These tariffs are affected when energy companies announce an energy price rise. They're capped by the Ofgem price cap, which is £1,641 from 1 April to 30 June (rising to £1,862 from 1 July to 30 September), but it doesn't mean they can't go up when the price cap sees an increase - it just means suppliers can't charge more than the cap limits them to.
The difficulty with the price cap is that there are often lags between wholesale energy price changes and the cap reflecting those changes. The cap is calculated every three months, so if global prices were to spike today (as they could do given the current situation in the Middle East), the cap might stay low for two months and then jump up, leaving standard tariff customers with a big bill shock.
If you're not on a fixed deal, it's important to compare energy deals to see what the current situation means for you.
On the plus side, standard variable rate plans do not have an exit fee. That means you are free to switch to a new deal without facing a penalty at any time, because there is no set end date.
How can I check if I’m on a standard energy plan?
You're probably on a standard energy tariff if:
You've never switched energy supplier
You haven't switched energy supplier for a year or more
You were recently on a fixed deal which has now ended
Your current tariff name includes words including but not limited to "Simpler", "Flex", "Basic", "Standard" or "Variable".
How to switch from a standard energy plan to a fixed deal
Usually, switching energy from a standard energy plan is easy because you can be assured you will not pay an early exit fee, though there may not be any suitable deals for you given the current energy market situation. To switch away from a standard energy plan, run an energy comparison to see all available plans for you.
Uswitch can help carry out the switch for you and no cables or pipes will need to be replaced or changed. The switching process happens at an administrative level between the suppliers so that your energy service is never disrupted.
Comparing and switching energy suppliers only takes a few minutes and you'll be notified of the date your gas and/or electricity supply will be switched. To find out more, read about how to switch your supplier for gas and electricity.
What are the benefits of a fixed plan?
A fixed rate plan gives you a guaranteed rate on the cost per unit of your energy. The rate will not go up during the length of your contract even if the supplier has announced energy price rises. It can also provide peace of mind, but it's a good idea to keep looking out for better deals every now and again, and especially during the last few months of your deal.
Remember, once your fixed rate plan comes to an end you will automatically be switched to a more expensive standard variable rate tariff.
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Run an energy comparison
Click here to compare energy prices and get started on your energy switch.
For the most accurate long-term view of your costs and savings, you can also compare deals with July changes already factored in.
