Ask our Expert

What’s the difference between a standard and an online energy tariff?

On the subject of different energy tariffs, our expert says...

Hello Christine,

You’re right, British Gas did cut its electricity prices by 10% on May 7 2009, however the reduction only affected customers on the standard British Gas (www.britishgas.co.uk) tariff.

Energy suppliers have a number of different tariff options, and if you understand the difference between them you could end up paying significantly less for your gas and electricity. Below is a breakdown of the difference between standard tariffs and online tariffs, and information on how to find the cheapest tariff for you:

Standard energy tariffs

An energy suppliers’ standard tariff is the basic energy deal you’ll get from the supplier if you don’t sign up to an online tariff, fixed energy tariff, social tariff, Economy 7 tariff or green energy tariff.

A standard tariff is not usually discounted, and customers will receive quarterly paper bills which can be paid by cash, cheque, credit card or standing order.

Unlike fixed energy tariffs, which sometimes come with exit fees, if you want to switch from a standard tariff you won’t be faced with a penalty. And there is usually no minimum contract length.

However, standard tariffs are the most expensive on the market.

Online energy tariffs

Most energy suppliers now offer online tariffs, which let you manage your account online - editing payment details and entering your own meter readings.

Instead of a paper bill each month, you’ll receive an email when your payment is due. If you pay by direct debit you won’t need to do anything, otherwise you can log into your account online to pay your bill.

Because of this, your supplier will be able to pass on the savings it makes (through not having to send out meter readers and bills) onto you, making your bills a lot cheaper. The cheapest online tariff is currently Online Energy from British Gas (www.britishgas.co.uk). Other suppliers online tariffs include Online Energy Saver 5 from Scottish Power, and FixOnline from E.ON.

This kind of tariff is ideal if:

• You have easy access to the internet
• You want to be able to access your account at any time
• You want to eliminate the risk overpaying on an estimated bill

Online energy tariffs also make you more conscious of the amount of energy you’re using each month, so you’ll be more likely to cut down - reducing your bills and your household’s carbon footprint.

The cheapest energy tariff

The cheapest tariffs are available to customers who sign up to an online tariff, such as Online Energy or Scottish Power’s Online Energy Saver 5, and pay their bills by monthly direct debit.

Most suppliers offer discounts for signing up to a dual fuel tariff (when you take both gas and electricity from the same supplier). Submitting your own meter readings will save more money, as estimated readings can often be inaccurate and you’ll pay more for a meter reader to visit your home.

Read our guide on saving money on your energy tariff for more information. Also, don’t forget to compare tariff prices online using our energy calculator, or by ringing our freephone customer services number on 0800 094 9089.

Hope this helps you understand the difference between the two tariffs Christine, and hope it helps you save money on your gas and electricity bills.

Ask us a question

If you have an energy query please email ourexpert@energychoices.co.uk