Marcel | Edited by Jenny
Updated July 2016
An Economy 7 tariff gives a cheaper electricity rate at night and a more expensive one in the day. Done right, it can save you money. Done wrong, it can cost you more.
This guide shows how to check if it's right for you and how to maximise the gain.
In this guide
How Economy 7 works
Back in 1978, the first Grange Hill series aired, the Bee Gees topped the charts with Night Fever, and energy providers launched the first Economy 7 electricity tariffs (there are no gas tariffs). Fast-forward to 2016 and there are now around 3.5 million people with Economy 7 meters.
They give cheaper rates in the dead of night and pricier ones in the day. They're intended mainly for people with storage heaters, which draw electricity in the evening or night-time, then release their heat in the day when needed.
The cheaper, off-peak rate runs from midnight to 7am, while the more expensive daytime rate covers the rest of the day, although precise times can vary by supplier.
Economy 7 is often called a 'time-of-use' tariff, as what you pay depends on when you use electricity. There are other time-of-use tariffs such as Economy 10 – see Is Economy 10 any good?
Few energy providers push this tariff now, and the problem is many people are still on Economy 7 when it's not right for them. Daytime rates can be hideous, so you can end up massively overpaying.
This is all about the price of the units and when you use them. The table below shows you the cost difference between the cheapest Economy 7 tariff and the cheapest electricity-only tariff. If used right, on average, an Economy 7 tariff could save £45/year.
Cheapest Economy 7 vs cheapest electricity-only
|Tariff||Peak rate||Off-peak rate||Standing charge||
Average cost (1)
|Cheapest Economy 7||12p/kWh||6.3p/kWh||13.6p/day||£431/year|
|Cheapest normal electricity-only||9.4p/kWh||9.4p/kWh||19.8p/day||£476/year|
|(1) Based on 4,300kWh/year. Economy 7 assumes 55% off-peak usage. Last updated: July 2016|
The quickest way is to check your bill. An Economy 7 bill looks something like this, with night-time and daytime readings. See "electricity – day" and "electricity – night" on the right-hand side.
Your bill will also have a Meter Point Administration Number (MPAN) on it. The top line of this should start "02". If your bill is confusing, call your supplier to check if you're on Economy 7. Find out how to understand your bill by using our Energy Bills Explained tool.
Economy 7 meters vary wildly, even those from the same supplier. Some older systems have two meters – one for the off-peak rate, and a separate meter for peak rate.
Others have just one Economy 7 meter that takes two readings. Older meters receive a radio signal that switches it to the off-peak rate. Modern ones receive a digital signal that does the same job.
Some Economy 7 meters have two sets of numbers. One is usually marked "normal" (the pricey daytime tariff), the other "low" (the night-time reading).
Your supplier will be able to explain it for you if you're unsure.
The simple answer is yes – but let's get nerdy. A nifty energy cost calculator tool on comparison site UK Power shows how much it costs to use typical electrical appliances, including kettles and TVs, over a month.
Enter how much you pay for a unit of electricity (in pence per kWh), and it shows you how much it typically costs to run different appliances.
The cost per month of using a typical tumble dryer for 20 hours a month is £4.51 on the cheapest electricity-only tariff. Yet on the cheapest Economy 7 tariff night rate, it's £3.02. That's a saving of around £18/year, just on one appliance.
If you want to try out UK Power's cost calculator for yourself, check your bill to find out what kWh rate you pay. Type this figure into box five (electricity price) and the calculator does the rest for you. Note the result will be an estimate of the monthly cost.
If you want more accurate results and you can find out the watts for a device (some dishwashers show a figure such as "4,300 watts" on the front, for example), type this into the first box, where it says "Watts (electric usage rating of your items, 1 kilowatt is 1000 watts)".
Economy 7 user? See if it's right for you
Used correctly, Economy 7 can help you save cash. Yet if it's not right for you and you use nearly all your electricity in the daytime, opening bills could be a painful experience.
Thousands are on the wrong tariff. About 38% of 'time-of-use' customers don't have storage heating, or don't use any appliances at off-peak rates, according to a survey by former campaign body Consumer Futures (now subsumed into Citizens Advice). And these are the key things you usually need to make it work.
In a nutshell, if you use 40% of your electricity at night, and you use electric storage heating in the cheap period as well as setting appliances to run at this time, then it's worth sticking with. This usually works in households where everything's powered by electricity.
To be sure it's good for you, check these simple rules.
Rule 1: You usually need storage heaters
If you don't have storage heating, Economy 7 isn't worth it in most cases. You can time storage heaters to come on for several hours over the cheap night-time period.
They use electricity to warm up during off-peak hours at night. Heat-retaining bricks inside them store this up and release it the next day.
They consume masses of electricity. That's why using them when it's cheaper is critical if you're on Economy 7. If you use one on an expensive normal tariff, it could be dear.
There may be a few households without storage heating where savings can be made. An example is if you work nights. But this would require a big effort on your part to use electrical devices through the cheaper hours.
Storage heating is the most important device to have, but Economy 7 isn't just about which devices you've got, it's about how you use them.
Rule 2: You need to use as much electricity as possible at night
You have to use a lot of electricity at night to save cash with Economy 7. Estimates vary by provider, but as a rough rule of thumb and based on our research, you should use around 40% of your electricity at night.
Sometimes the daytime rate on an Economy 7 tariff can be over twice as much as the cheaper rate. So maximising your night-time usage instead, in any way at all, will help.
How to work out how much electricity you use off-peak
You can work out your proportion of cheap night and more expensive day usage with numbers included in your bill.
Step 1: Check your bill.
Look for something like: "Electricity used = 2,200kWh." This number is the total electricity used over a certain period.
Step 2: Check how the usage is split
Your bill should tell you how this total is split into night readings and day readings. For example, it might say 464kWh for night-time and 1,808kWh for daytime usage (as the example above shows).
Step 3: Work out the percentage
Now you can work out the proportion of your night-time and daytime usage. If you work both out as a percentage, you'll know how much electricity you're using during the cheaper period. Once you know that, you'll know if you're using Economy 7 in the best way.
Here, you need to work out the electricity you've used at night. In the bill above, under "night readings" this is 464kWh. Multiply this by 100 to help get a percentage. So 464 x 100 = 46,000 (rounded down)
The divide this 46,000 total by the TOTAL AMOUNT of electricity used. In the bill above, next to "total electricity kWh used", this figure is 2,272kWh
So, 46,000 / 2,272 = 20%
So in this case, 20% of electricity is being used at night. Our research shows using 40% of your electricity at night helps you save on Economy 7, so in this case, Economy 7 isn't being used in the best way.
Here's the formula you need to use with figures from your own bill.
kWh used at night x 100 / total kWh used = Your night electricity usage
Rule 3: The more electricity you use at night, the more you save
Like any electricity tariff, Economy 7 rates vary by region and supplier. Do it right and savings of more than £100 may be possible (in extreme cases) compared to the best electricity-only deal.
Always do a comparison yourself (note Economy 7 comparisons need doing carefully; see our How to do an Economy 7 comparison section), because prices will vary depending on how much electricity you use and which region you live in.
Economy 7 typical annual savings with night usage
|Tariff and savings||10% usage off-peak||20% usage off-peak||30% usage off-peak||40% usage off-peak||50% usage off-peak||70% usage off-peak|
|Cheapest Economy 7 tariff||£541||£517||£492||£468||£443||£394|
|Savings compared with cheapest non-Eco 7 deal||-£65||-£41||-£16||£8||£33||£82|
|Energy usage calculated at 4,300kwh/year. Average prices across all regions.|
The table shows that small savings start when you use 40% of all your electricity on the cheaper rate, on the cheapest Economy 7 deal.
If you use a low proportion of electricity at night on Economy 7 – for example 10% – you'd be more than £40 better off on the cheapest electricity-only deal.
Rule 4: Having a hot water tank helps too
Some hot water cylinders with two immersion heaters inside start automatically during off-peak hours. Others should have a timer plugged into the system, so you can set it to start in the early hours.
One of the immersion heaters inside (usually the lower of the two) heats the whole tank during the off-peak period. You can use the other immersion heater manually, as a booster, if you start to run out of hot water.
Make sure your hot water cylinder is lagged. That means there should be a fibreglass or foam cover around the cylinder. If it's not lagged, the cylinder loses heat and wastes both your electricity and your cash.
Economy 7 will also be better for you than a normal deal if you have a hot water tank, use a lot of water regularly and live in a property where everything runs off electricity.
Rule 5: Compare to find the cheapest Economy 7 deal
Once you know Economy 7's right for you, it's time to see how your tariff stacks up to others, and to switch to the cheapest if you're not on it.
Compare Economy 7 tariffs
To compare Economy 7 deals, sign up to our free MSE Cheap Energy Club comparison. It'll compare your exact price and give you £15 cashback for an electricity switch.
When you're entering your details at the start, where it says "What is your Economy 7 usage?" select the proportion of electricity you use on the cheaper night rate (see how to check). It's important to be as precise as possible. That way, you'll get a more accurate estimate of how much alternative deals will cost.
Once you've done a comparison, it'll display the cheapest deals for you. They might not have "Economy 7" in the name, but you can still get them.
Compare Economy 7 with standard tariffs
Here's how to check whether you'd be better off with an Economy 7 tariff.Step One: Find your cheapest Economy 7 deal
Do a normal Economy 7 comparison on Cheap Energy Club. Put in your kilowatt hours (kWh) under usage as normal to find your cheapest Economy 7 deal.Step Two: Find your cheapest non-Economy 7 deal
Do the comparison again. This time don't select the Economy 7 field. When it asks you for usage in kWh, add up your Economy 7 and non-Economy 7 kWh usage. Type in this total. Now you'll get a result of what your cheapest standard tariff is. Compare this to the cheapest Economy 7 tariff you found earlier.Step Three: Calculate the price difference
If the best standard tariff is cheaper than the best Economy 7 tariff, it's worth switching. However, a word of caution: we would only switch if there's a minimum 5-10% saving. Check if there's a cost to change your meter too. Factor this in and if you'd still save, it's worth switching to a normal meter.Step Four: See if you can get around supplier-switching charges
If you do want to switch to a normal meter but your supplier charges for the change, there's a way to solve this without having to pay.
See if you can switch to another Economy 7 supplier that will allow you to change to a normal meter for free. If you can, switch to its cheapest Economy 7 tariff, then immediately switch to the cheapest tariff you found in Step Three once your meter has been changed.
Compare fixed tariffs
You can fix electricity costs with Economy 7, just like on a normal tariff. Fixing protects against potential price rises, and gives you certainty that the cost of your energy won't rise.
Go back into Cheap Energy Club (selecting that you have an Economy 7 meter), and click the Top Picks tab. This'll show you a selection of the cheapest and longest fix deals available.
We're not saying you should go there for the cheapest bills, but doing this comparison will give you an extra option to fix the annual cost of your bill if you want protection against potential price rises.
As for how long to fix for, that depends whether you prefer the lowest possible bills now, or protection against hikes for longer. See more on fixes in our Cheap Gas and Electricity guide.
Still unsure? Do a comparison of normal tariffs for belt and braces
If you're still uncertain Economy 7 is right for you, you can compare normal electricity tariffs.
You can only compare like-for-like tariffs, so that means comparing between Economy 7 deals, or standard tariffs with other standard tariffs. Yet there are ways round this.
Go to our free Cheap Energy Club to do the Economy 7 comparison as described above. Note down your cheapest.
Now do a new comparison, but at the start, when you're entering your details, where it says "do you have an Economy 7 meter?", click "no".
If you know your monthly or annual usage of electricity (it tells you on your bill), type this in. If not, type in how much you pay a month (also on your bill). Cheap Energy Club will then show the cheapest normal electricity tariffs.
If you're on Economy 7 and decide it's not for you, you may be able to switch to a normal meter for free. There may be a few instances where you'll be charged around £50 for a new meter. There is a way to beat this charge though. Follow these steps:
Step one: Check if your supplier will switch you for free
Ask your current provider to switch you to a normal, non-Economy 7 meter. The vast majority of suppliers don't charge.
Step two: If your supplier charges for a new meter, see if you can switch to one that doesn't
If you find your current supplier DOES charge for a new meter, check the following table to see if you can switch to a new provider that will do it for free.
Charges for Economy 7 meter changes
|Switch from||British Gas||SSE||Scottish Power||Npower||EDF Energy||E.on|
|Economy 7 to standard||Free||Free||Free||Free||Free||Free|
|Standard to Economy 7||Free||Free||Free||Free||Free||Depends on meter (1)|
|(1) E.on may charge depending on what meter you currently use. Call E.on for confirmation if you're thinking of switching to it.|
Step three: Do a comparison
The supplier will probably automatically move you to a standard tariff on your new meter. As soon as you move onto the new meter, do a comparison on our free Cheap Energy Club and jump ship to the cheapest deal.
Note: If you've got storage heaters and move to a electricity-only tariff, using them on a normal rate can be expensive.
Get Our Free Money Tips Email!
For all the latest deals, guides and loopholes - join the 10m who get it. Don't miss out
9 Economy 7 cost-cutting tips
If you've decided Economy 7 is worth sticking with, and you're certain you're on the best Economy 7 deal, here are nine tips to push it to the max.
Double-check your off-peak times
Always check exactly when your off-peak period begins and ends. The cheap periods on Economy 7 can vary between each supplier and by region. Off-peak usually starts at midnight and ends at 7am.
But even if you're on those hours, off-peak might start at slightly different times each day. For example, one night it might start at 12.05am, but another night it may begin at 12.15am. It should only vary by a few minutes though.
This happens because companies don't want all customers to turn appliances on at the same time, as it could overload the network, so they change the times.
Get your supplier to tell you when your meter switches from the pricey rate to the cheap one.
Max your night-time usage
Using Economy 7 successfully means making sure you stick to putting on appliances through the night. Here are some tricks:
Grab cheap timers. Install timers on washing machines (if not already built in). You can get them from £5 from Screwfix.com. They're easy to install – just plug the machine into the timer, then the timer plugs into the mains, like an adaptor.
Charge gadgets at night. Charge as many gizmos as possible during the cheap hours, from phones to laptops and rechargeable batteries.
Use energy-efficient appliances. Economy 7 brings pricey daytime rates, so make sure the appliances you use during peak hours don't rack up your bill. Try using energy-efficient light bulbs for a start.
Warning! Set tumble dryers to come on just before you wake. Fire brigades advise against setting tumble dryers to come on while you're asleep. Set it to come on at, say, 5am if you'll be waking up soon after.
Be careful when the clocks change
Many Economy 7 meters are set to Greenwich Mean Time. And some use clocks which STAY on GMT, even when the clocks go forward at the end of March.
"That's bonkers in the 21st century," you might think. It causes problems because you could end up using electrical appliances during what you think is off-peak, when in fact you're paying the pricey peak rate. If you set the dishwasher or washing machine to come on just after midnight during British Summer Time, the Economy 7 meter might still be on GMT.
This means the meter still thinks it's just after 11pm – a peak period – so you might be shocked when you discover this has all been charged at the expensive rate. Sometimes the cheap rate period moves from something like 1am to 8am during GMT, to between 2am and 9am.
Find out EXACTLY what your cheap hours are during BST. Sometimes a supplier will slap a sticker on your meter, telling you off-peak and peak periods during GMT and BST.
Ensure your meter's clock isn't on the blink
Older mechanical clocks have been known to go on the blink. Check yours to make sure it hasn't thrown your off-peak hours completely out of sync.
If the daytime reading on your Economy 7 meter is ticking over at night, or vice versa, call your supplier pronto to get it fixed.
Maximise the energy efficiency of your storage heaters
There are broadly three types of storage heaters. The first is a manual one with only really basic controls – an input/output dial.
Another is a heater with a thermostat. This one releases heat depending on the temperature of the room it's in.
The third type is a combination of the previous two. It has a convector heater to use as a booster during peak hours.
If you've got a manual storage heater, with just the input/output dial, make sure the output is set to low before it comes on in the night. The output dial normally goes from 1-6, so make sure it's set at 1.
This will ensure the storage heater charges up through the night without releasing heat – and wasting your electricity.
Got a top Economy 7 tip we haven't listed? Feed back in the Economy 7 discussion.
Call your supplier if your day usage soars
If you start to use electricity far more during the day while on Economy 7, check the meter or call your supplier to find out how much you're using – and how much it's costing you.
Don't leave it and let inertia get the better of you, that's often how energy companies make money out of customers.
Do the energy-saving basics
There's no point switching to Economy 7 if you wander round the house in boxers or bra 'n' knickers with radiators on full and windows wide open.
Sensible changes can save you large, from draught excluders and setting washing machines to 30°C to low-energy light bulbs and notching down the thermostat.
See our Energy Mythbusting guide for full details.
Do a meter reading every time you get a bill
Don't rely on your energy provider's estimate; these are often way out. If it's under-billing, you'll have a big whack to pay when it gets an accurate reading. If it's over-billing, then it's unfairly got your cash.
If your direct debit is way off kilter, call up and ask for it to be changed. You have a range of rights to ensure it's correct. See the full Energy Direct Debits guide for template letters.
Check if you can get a smart meter
A smart meter records how much energy you use, usually half-hourly, and sends this data back to the supplier.
It comes with a display monitor for your home showing you, at that moment, exactly how much energy you're using and the cost. You can see if you're racking up a large bill at any time, by checking if you're using too much during expensive daytime hours.
Every UK customer will be offered a smart meter, free, by 2020. Some will get smart meters before others, depending on supplier.
Is Economy 10 any good?
Economy 10 is another 'time-of-use' energy tariff that gives a cheaper night rate, but it's not as common as Economy 7.
It's similar to Economy 7, but offers – you've guessed it – 10 hours of cheaper electricity rather than seven. These cheaper hours are usually split into three different periods, so you get extra boosts of cheap electricity during the day. It needs an Economy 10 meter too.
It's only good for those with storage heaters who use lots of energy during the cheaper periods each day. The cheap times often work out as:
Three off-peak hours between midday and 3pm,
Two off-peak hours between 5pm and 7pm,
Five off-peak hours between midnight and 5am.
Of the big six suppliers, only EDF, Npower and SSE have customers on specific Economy 10 tariffs. Even then, they don't usually promote the tariff to new customers.
You can't compare Economy 10 tariffs on comparison sites. But our handy step-by-step guide shows you how to work out if you're overpaying on Economy 10 prices, and if it's worth considering switching.
How to compare on Economy 10
Step 1: Gather all your bills for the year and add together your entire usage (measured in kWh on the bills) for the full 12 months. Note the total usage down.
Step 2: Work out the total you paid over the year. This'll incorporate the cheaper rates you paid during the cheaper Economy 10 hours.
Step 3: Keep handy your annual kWh usage figures from Step 1, then go to a comparison site. Choose the standard price of an alternative supplier. The tariff and supplier you pick won't matter – it's the usage figures which count here.
Step 4: Type in the annual usage figures from your bill and compare as normal. DON'T select Economy 7 when you type in your details.
Step 5: When you get the result, ignore the savings. Note down the annual price of what you would pay. Remember, this is an estimate of what you'd pay over the year.
Compare this to the figure you worked out in step 2 – what you've actually paid over a year. If the results show you're overpaying in a big way, consider switching to a normal meter. This will enable you to compare and switch to your cheapest deal on comparison sites.
What does it cost to change meter?
You can often switch from Economy 10 to Economy 7 for free, if you stay with the same supplier, but you're likely to need an Economy 7 meter installed. Double-check with your supplier – in some cases you might get charged up to £50.
If you want to switch from Economy 10 to a normal meter, you may also get charged up to £50. Charges can vary, so check with your supplier.
There are other time-of-use tariffs too
* Economy 9
This tariff offers nine hours of cheap electricity. It's offered by EDF in London.
You can switch from it to Economy 7 or standard, but you might have to pay for a meter change. EDF doesn't recommend going from Economy 9 to standard if you've storage heating.
* Economy 20:20
This is a little more complex deal from EDF, where an off-peak rate usually applies for 10 hours between 9pm and 7am Monday to Friday. Off-peak also applies from 9pm on Friday all through the weekend till 7am Monday. Economy 20:20 is normally set to GMT, so during BST cheaper periods run from 10pm till 8am on weekdays.
* Economy 2000
This is a limited, specific tariff offered by Scottish Power. The off-peak hours are provided at Scottish Power's discretion, but add up to 18 hours in total. Each individual peak period will not exceed two hours. This tariff is intended for storage boilers that provide general heating or both general and water heating.
Get Our Free Money Tips Email!
For all the latest deals, guides and loopholes - join the 10m who get it. Don't miss out