What does ‘standard variable tariff (SVT)’ mean?

Nuts About Money squirrel

A standard variable tariff (known as an SVT) is a way that energy suppliers charge you for the energy that you use. 

If you’re on a standard variable tariff, it means that you’re getting charged your supplier’s default rate. This tends to be much more expensive than other tariffs that are available and it can also go up and down without warning. Normally, this will be roughly in line with what your supplier is paying for energy from the National Grid, but it doesn’t have to be. In fact, your supplier can choose to change it whenever they fancy. Urgh!

Nobody in their right mind would choose to be on their supplier’s SVT. Instead, they normally end up on it by accident.

Basically, when you sign up with an energy supplier, they’ll normally give you a cheaper, fixed-term tariff to encourage you to choose them. This means that you’ll pay a fixed price for each unit of energy that you use for a given period of time – usually 12, 18 or 24 months.

When your fixed-term tariff runs out, your supplier will automatically move you onto their SVT, which is much more expensive. They’re hoping that you can’t be bothered to change it, or that you won’t know how. 

However, to avoid the price hikes, you can just choose another fixed-term tariff by switching suppliers or asking your current supplier if they can offer you a better rate.

Nuts About Money tip

You could save up to £300 by switching to a new supplier instead of letting your current supplier move you onto their SVT. You can legally leave your fixed-term tariff and find a new supplier up to 49 days early without having to pay a penalty.

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