Get £50 off energy standing charges with EDF's new discounted Price Cap tariff

EDF's new tariff is a decent deal for lower energy users – say, those currently paying up to £100 a month – above that there are other options that could work out cheaper. Here's our full analysis.

How EDF's Ensure tariff works

Regulator Ofgem's Energy Price Cap dictates the maximum rate that firms can charge on their standard tariffs. Over 80% of homes in England, Scotland and Wales are on price-capped tariffs, and most firms set their rates at the maximum – so in effect the Price Cap dictates what most people pay. The Price Cap changes every three months on 1 January, April, July and October – so on Monday we'll move to the July rates. 

As EDF Ensure is a tracker tariff, it will also change every three months in line with the Cap – though it's being launched at the cheaper July rate already. So switch now and you get a week of extra savings, before the Price Cap catches up. 

EDF told us it will apply the same fixed discount on the Price Cap standing charges to all payment methods across all regions (and standing charges vary widely by region), so you get a flat £25 discount on electricity and/or a flat £25 on gas over 12 months.

It's open to most people – including those on prepay

Here are the key details:

• Who can get it? Most people. You can be dual-fuel or gas or electricity-only. It allows most payment methods (Direct Debit, pay in receipt of bill and prepayment meter). The only real stumbling block is you must have, or be willing to get, smart meters.

• Does it have early exit fees? Yes. If you leave before the end of the year, you'll have to pay £25 per fuel early exit fee (so the same as the discount – which is pretty low. It means if far cheaper tariffs are launched elsewhere then there's not a big penalty to leave and take advantage).

• How to get it: New customers to EDF can get a quote online and switch*. Existing customers can apply in their online account or via its app. 

This tariff works best for lower energy users

As energy bills are made up of your energy use plus standing charges (the fixed daily charge for having access to gas and electricity), lower energy users will see standing charges make up a higher proportion of their total energy bill.

As a result, the flat standing charge discount on EDF's Ensure tariff is especially powerful for lower users (say, under £100 a month). It's an easy way to cut bills without cutting your usage.

We've long been campaigning for standing charges, which Martin refers to as a form of energy poll tax, to be lowered – see Martin's 'Why are standing charges so high, what can be done?' blog for more info.

How EDF Ensure compares to other deals you can get

While EDF's Ensure tariff will be cheaper than staying on the Price Cap, there are other options you may want to consider, especially if you're a higher energy user.

1. E.on Next's 'Pledge' Price Cap Tracker – likely beats EDF Ensure if you're a higher user.

   E.on Next's Pledge is also a tracker tariff, and promises to remain roughly 3% below the Cap (£50 a year on typical use). However, unlike EDF Ensure, the Pledge tariff discounts the unit rates, instead of the standing charges. That means the more you use, the more you save versus the Cap. 

   E.on has now published the rates for its Pledge tariff for July, so we can do a like-for-like comparison of rates for E.on Next Pledge and EDF Ensure (EDF launched the tariff based on July's Price Cap rates). From 1 July, the standing charges on the Pledge tariff will be at the maximum allowed, while both the gas rates and electricity rates will be about 4% cheaper.

   So E.on Next Pledge's unit rates will be around 4% lower for gas and 4% lower for electricity than EDF Ensure's rates, but its standing charges will be 18% higher.

   Which one works out cheaper for you depends on how much energy you use. The easiest way to measure this is by looking at what you currently pay for your gas and electricity: if it's less than about £170 a month, EDF Ensure is likely to win. Above that, E.on's Pledge tariff is likely to win.

2. Utilita's 'no standing charges' tariff – likely beats EDF Ensure if you use NO energy on some days.There is one tariff with ZERO standing charges from Utilita – so if you don't use anything that day, you don't pay anything. Instead of a standing charge, it charges a much higher unit rate for the first 2kWh of daily use (which effectively acts as this tariff's standing charge).

   Due to the much higher rates for those first 2kWh of usage, it is only good if you have lots of days with no usage at all, either because you're going away, you don't live there full-time (if it's a second property) or, for example, you only use gas for central heating and don't have it on in the summer. In most other examples of low usage, EDF Ensure is likely to be the winner.

   On average, you'd pay 22p for gas and 54p for electricity for the first 2kWh each day on Utilita's tariff. Then for each unit (kWh) you use after, it's 6p for gas and 24p for electricity. On typical use – 32 units of gas and 8 units of electricity a day – this essentially works out the same as the Price Cap.

3. Cheap fixes – likely beats EDF Ensure, especially if you want price certainty.When looking to fix, it's always best to check how deals stack up to the Price Cap over the next 12 months. Based on current Price Cap predictions, we think fixing is worth considering if you can find a deal for up to 2% more than the current (April to June) Price Cap.

   Currently, there are deals up to 7% cheaper than the Price Cap – so it's well worth looking at fixing, especially if you value the price certainty it offers. Whether EDF Ensure is cheaper than the top fixes again depends on how much you use. Assuming you're a dual-fuel customer:

   - If you spend £500 a year on energy, EDF Ensure would be 10% lower than you'd pay on a price-capped tariff

   - If you spend £1,000 a year on energy, EDF Ensure would be 5% lower

   - If you spend £5,000 a year on energy, EDF Ensure would be 1% lower

   So as you can see, the less you spend on energy, the bigger discount you're getting. As there are fixes up to 7% cheaper than the Cap, you'd need to spend about £700 a year or less on gas and electricity for EDF Ensure to beat these top fixes.

   See our 'Should you fix?' guide for a full list of the cheapest fixes, or our Cheap Energy Club for a bespoke comparison.

4. Octopus 'smart tracker' tariffs – could beat EDF Ensure if you're a savvy energy user and don't mind risk.There are also even smart tracker tariffs, such as Octopus Tracker and Agile Octopus (from Octopus Energy) where the rates change daily or even every half-hour.

   The rates for these tariffs change based on wholesale costs, which makes it more of a gamble as they could spike suddenly, but over recent months it's been very substantially under the Price Cap.

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Note: We will get paid if you click through to EDF and switch to its Ensure tariff via the links above that have an * next to them. We plan to donate a proportion of what we're paid to fuel poverty charity National Energy Action.

EDF will also donate to National Energy Action an additional £10 for each household that signs up to the Ensure tariff via these links – including both new and existing customers – up to a maximum of £100,000.