Standard Variable Tariffs

Discover all there is to know about standard variable tariffs (SVTs). If you’re on an SVT, find out how they work and how to switch away from your standard energy deal.

What is a standard variable tariff?

A standard variable tariff (also known as a “default tariff”) is an energy deal that has variable prices and no exit fees. What this means for energy consumers is that fuel prices can go up or down at any time (as opposed to a fixed tariff), however you are free to switch away if prices rise.

Standard plans are often an energy supplier’s most expensive. You’ll usually be put on a standard variable tariff that you haven’t chosen if your fixed-term contract ends and you haven’t switched to a new one. You’ll also be on an SVT by default when you move into a new property and take over the energy bills.

Ofgem define a standard variable tariff as:

“A basic energy tariff with variable prices that can go up and down with the market. These tariffs are often more expensive than a fixed-term tariff.”

How do variable energy tariffs work?

Variable tariff prices are determined by changes to wholesale prices within the energy market. If wholesale prices go up, these increases will be reflected in your bill and vice versa. Wholesale prices refer to the costs incurred by your supplier in purchasing the fuel you use. To find out more about wholesale prices and what else drives fuel prices, have a look at our UK energy market guide.

How can I check if I’m on a standard energy plan?

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 a standard tariff.

If you’ve never switched supplier then it’s likely you’re on an overpriced standard tariff, so make sure to check if you can save.

Should I choose a standard or a fixed plan?

Most of the cheapest tariffs on the market are fixed for 12 months. So, it’s normally better to sign up for a fixed energy deal. However, fixed energy tariffs can come with early exit fees, so if you need flexibility, an SVT is a good option. However, always remember to consider your unique situation, and research the pros and cons of fixed plans before committing.

What are the pros and cons of standard variable plans?

Pros:

• Increased flexibility with no exit fees or end-date
• If wholesale prices fall so can your bills (although suppliers won’t always pass the savings on)

Cons:

• Generally, more expensive than fixed deals
• Your supplier can increase your prices at any time

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

If you’re on a standard tariff, first make sure that you aren’t paying a lot more than you should. Run a price comparison to see if there are cheaper deals elsewhere.

Average prices on the SVT will change every three months in line with the energy price cap, so make sure to pay attention to these changes.

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 while on the SVT will vary.

However, these costs don't fluctuate 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.

The cost of being on an SVT will change every three months in line with the energy price cap set out by Ofgem, and cannot exceed this price.

And, if Ofgem reduces the maximum amount a supplier can charge for energy, 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 (measured by kilowatt hour or kWh) they use while on their standard variable tariff.

The cap also includes a maximum price that can be applied for a supplier’s standing charge (the fixed daily amount you pay to stay connected to the grid), and changes every three months.

For the period between 1 January and 31 March 2024 the cap is set at £1,928 a year for a typical dual fuel household that pays for their energy by Direct Debit.

How can I switch away from a standard variable tariff and will I be charged exit fees?

SVTs do not have any exit fees, meaning you can switch at any time without having to pay.

If you’re currently on an SVT, its always a good idea to run a price comparison to see what, if any, fixed-rate tariffs are available. Once you find a better deal, start a switch to the new supplier.

Will my standard tariff come to an end?

No. Standard tariffs 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 you will normally roll on to you suppliers’ standard tariff at the end of your contract.