Standard Variable Tariffs

Find out how Standard Variable Tariffs (SVTs) work, and what you can do if you're on one.

What is a standard variable tariff?

A standard variable tariff, also known as a”default tariff”, is an energy deal whereby the price you pay for your energy will change every three months in line with the energy price cap set out by the energy regulator Ofgem.

Ofgem reviews the level of the cap four times a year in February, May, August, and November.

On the SVT, if the price of gas or electricity goes up, so will what you pay for your energy (unit rate and standing charge). Some analyst firms - such as Cornwall Insight - offer energy price predictions under the cap for up to three quarters in advance.

However, these forecasts are not guaranteed, making it more difficult to efficiently budget and manage your energy bills on the SVT.

How can I check if I’m on the SVT?

You'll often find yourself on the SVT if you've either never switched suppliers before, or you were previously on a fixed tariff and you did not switch once it ended. You'll also be on the SVT by default when you move into a new property.

The best way to find out what tariff you’re on is to look at a recent bill. You should be able to find the tariff name either on a paper bill or in your online account. If you don’t have a bill to hand get in touch with your supplier to ask for your tariff name and details.

Note, while many suppliers use clear names such as “Standard Tariff”, which can easily be identified as the default rate, others use misleading names like “Flexible Saver”. If you're on a fixed tariff, your bill should also include a tariff end date and details of exit fees. So, if these are missing, you’re likely on the SVT.

Should I choose a standard or a fixed plan?

The cheapest energy deals on the market have historically been fixed for 12 months , although the overall value of these deals has decreased over time to reflect the ongoing instability in the energy market.

Most fixed deals will also carry early exit fees. So, if flexibility is a priority, you may prefer to stay on the SVT.

Always remember to consider your unique situation, and to research the pros and cons of fixed plans before committing.

What are the pros and cons of standard variable tariffs?

Pros:

• Increased flexibility with no exit fees or end-date
• If the price cap falls, so will your energy bills (although suppliers won’t always pass the savings on)

Cons:

• Generally, more expensive than fixed deals
• Prices change every three months as dictated by the energy price cap.

I’m on a standard variable tariff, what do I need to watch out for?

If you’re on a standard tariff, make sure that you're checking in on what you're paying at least every three months when the price cap changes. Run a price comparison to see if there are cheaper deals elsewhere.

Are standard variable tariffs any good?

Sometimes. If you’ve just moved house, for instance, you’ll be able to get a smooth supply of gas and electricity right from day one thanks to a standard variable tariff, and once you’ve moved in you can switch to a better deal without worrying about exit fees.

Even though prices can increase, most suppliers will give you 30 days’ notice when default prices are about to rise.

How much does a Standard Variable Tariff cost?

The prices you'll pay for your energy on the SVT will fluctuate.

However, these fluctuations don't happen at random; rather, they reflect what your supplier pays for your energy on the wholesale market and are applied to both standard credit and prepayment meters.

These costs will change every three months in line with Ofgem's price cap and cannot exceed the cap. And, if Ofgem reduces the price cap, then suppliers will have to reduce their standard variable rates accordingly.

What is the energy price cap?

The energy price cap sets a maximum price that a supplier can charge its customers for each unit of energy used while on the SVT. These units are measured in kilowatt hours (kWh).

The Cap also sets a maximum price suppliers can impose as a standing charge (the fixed daily amount customers pay to stay connected to the grid).However, unit rates and standing charges will vary depending on where you live.

The current Price Cap (April 1 - June 30 2024) is set at £1,690 for a typical consumer paying by direct debit.

What is a typical consumer?

To give people an idea of what an average household might pay while on the Price Cap, Ofgem, the energy regulator, has introduced 'Typical Domestic Consumption Values' (TDCV) for gas and electricity.

Ofgem defines a TDCV as a customer who uses 2,700kWh of electricity and 11,500kWh of gas per year.

However, it is important to remember that the price cap does not place a limit on the total cost a customer pays per year for their energy, and depending on your usage as an individual or household, you may end up paying more or less than the cap.

How can I switch away from the SVT and are there exit fees for doing so?

SVTs do not have any exit fees, so you can switch whenever you find a better deal.

If you're on the SVT, it's a good idea to periodically run a price comparison to check whether there are any better deals available.

Will my standard tariff come to an end?

No. SVTs do not have end dates, but the supplier can increase the price of your tariff at any time, as long as it does not exceed the current energy price cap.

If you are on a fixed tariff and you don’t switch by the end date of you contract, you will go on to your supplier's SVT.