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1 August 2021
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Economy 7 tariffs give cheaper rates during the 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 usually 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?
It depends. It's all about the price of the units and when you use them. If you have storage, or you use most you electricity overnight during the off-peak periods, then it can work out cheaper.
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.
The table below shows the cost difference between the cheapest Economy 7 tariff with seven hours at off-peak rates and the cheapest normal, single rate electricity tariff. Assuming 42% of electricity is used at night - the national average - an Economy 7 tariff could typically save around £22/year.
|Cheapest Economy 7||12.1p/kWh||8p/kWh||22p/day||£516/year|
|(1) Based on regulator Ofgem's average usage figure for Economy 7 of 4,200 kilowatt hours (kWh) a year. Economy 7 assumes 42% off-peak usage. Last updated: April 2020.|
In January 2019, Ofgem introduced a cap on all standard variable energy tariffs, limiting what suppliers can charge for gas and electricity.
Electricity prices are currently capped at £785/year on average for someone with typical Economy 7 usage. See what does the price cap mean for my bill for full info.
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.
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 £5.23 on the cheapest electricity-only tariff. Yet on the cheapest Economy 7 tariff night rate, it's £3.84. That's a saving of about £17/yr, 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 the 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)".
Used correctly, Economy 7 can help you save cash. Yet if it's not right for you opening bills could be a painful experience.
As a rule of thumb, if you use about 40% of your electricity at night, and use electric storage heating in the cheap period as well as setting appliances to run at this time, then it's worth sticking with – particularly if everything in your home is powered by electricity.
You can work out your proportion of cheap night and more expensive day usage with numbers included in your bill.
Look for something like: "Electricity used = 2,200kWh." This is the total units of electricity used over a certain period. It's an old bill, but the theory still applies.
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).
Now you can work out the proportion of your night-time and daytime usage.
Divide your night-time usage by the total amount of energy you have used and then multiply by 100 to get the percentage. For the example above it's (464 / 2,272) x 100 = 20%.
So in this case, 20% of electricity is being used at night – well short of the 40% benchmark.
Here's the calculation to use with figures from your own bill.
(kWh used at night / total kWh used) x 100 = % night usage
As electricity is an expensive way to heat your home, any discount on the rates you pay is usually a benefit.
Storage heaters 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.
If you don't have storage heating, Economy 7 isn't worth it in most cases.
Some hot water cylinders come with two immersion heaters inside, and can 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. This means there should be a fibreglass or foam cover around the cylinder. If it's not lagged, the cylinder loses heat and wastes your electricity and cash.
You have to use a fair amount of electricity at night to save a decent amount of cash with Economy 7 – about 40% of your total use to make it worthwhile.
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, in any way at all, will help.
Always do a comparison yourself (see How to do an Economy 7 comparison), as prices vary depending on how much you use and where you live. We've illustrated the potential savings below.
|Cheapest Economy 7 tariff||£571||£554||£537||£520||£502||£468|
|Savings compared with cheapest non-Eco 7 deal||-£33||-£16||£4||£18||£36||£70|
|Energy usage calculated at 4,200kWh/yr. Average prices across all regions.|
The table shows that you don't start seeing real savings until you use at least 40% of 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 typically be about £30/yr better off on a normal single-rate electricity tariff.
Once you know Economy 7's right for you, it's time to see how your tariff stacks up to others, and switch to the cheapest if you're not on it.
To compare Economy 7 deals and find the cheapest for you, use our free Cheap Energy Club – it'll give your exact prices, and if we can switch you it gives £12.50 cashback for an electricity switch.
When entering your details, you can enter the proportion of electricity you use on the cheaper night rate where it asks 'What is your Economy 7 usage?' (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.
Here's how to check whether you'd be better off with an Economy 7 tariff.
Step 1: 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 2: 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 day and night readings and type in this total. Now you'll get a result of what your cheapest single-rate tariff is. Compare this with the cheapest Economy 7 tariff you found earlier.
Step 3: Calculate the price difference
If the best single-rate 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.
Step 4: See if you can switch to a standard single-rate tariff
If you do want to switch to a single-rate tariff, it's worth asking if the provider will let you without having to change your meter – most suppliers now allow this. They'll simply add your day and night readings together and charge you the single flat rate for each.
Not all suppliers will do this though, so if you want to change your meter to a standard one, there are some providers that let you do it for free – mainly the big six (British Gas, E.on, EDF, Npower, Scottish Power, SSE).
If you're on Economy 7 and have found you'd save more by being on a normal single-rate tariff, you may be able to switch without the need to change your meter.
Check if your current provider, or the supplier you want to switch to, will let you move to a single-rate tariff without the need to change your meter.
Many suppliers now do this – they'll add your day and night readings together, and just charge you the single rate for everything you use.
If you're struggling to find a supplier that will let you switch to a single-rate deal with your Economy 7 meter, you can try getting it changed – most big suppliers will do it for free, including all of the big six providers (British Gas, EDF, E.on, Npower, Scottish Power and SSE).
If your provider does charge, consider switching to a provider that doesn't. Plus, if you do change your meter, check which tariff you're on once it's installed. Suppliers often move you to an expensive standard tariff, so always compare energy deals on your new meter. Use our free Cheap Energy Club and jump ship to the cheapest deal.
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.
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.
Using Economy 7 successfully means making sure you stick to putting on appliances through the night. Here are some tricks:
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.
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.
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.
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 duing 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.
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.
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.
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.
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.
See our Smart Meters guide for more info.
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 usually good for those with storage heaters or electric heating 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 shows you how to work out if you're overpaying on Economy 10 prices, and if it's worth considering switching.
Like Economy 7, you may also find that some suppliers will let you switch to a single-rate tariff without the need to change your meters. However, this is a lot less common for Economy 10.
Step 2: Work out the total you've paid over the year.
Step 3: Keep handy your annual kWh usage figures from step 1, then go to a comparison site. Choose the standard tariff with any 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.
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 a new 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.
* Economy 9
This tariff offers nine hours of cheap electricity. It's offered by EDF in London.
* 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.
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