What does ‘energy tariff’ mean?

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An energy tariff is what energy suppliers use to charge customers for the gas and electricity that they use. 

There are two main types of energy tariff – fixed and variable. A fixed-term tariff is when the price you pay for your energy is set a fixed price for each unit of energy that you use, for a given period of time.

On the other hand, a variable tariff means that your rate can go up and down without warning. Normally, this will be roughly in line with the price your supplier pays for energy from the National Grid, but in reality, your supplier can move it around whenever they like.

When you first sign up with an energy supplier, you’ll usually get put on a fixed-term tariff for 12, 18 or 24 months. Then, when your fixed-term tariff runs out, your supplier will automatically move you onto a more expensive variable tariff, known as their standard variable tariff (SVT).

Nuts About Money tip

When your fixed-rate tariff is coming to an end, don’t let your supplier move you onto their SVT. Instead, use a comparison site to compare tariffs and switch to a supplier who can offer you a cheaper rate. You could save up to £300!

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