Many households across the UK are facing a cost of living crisis as a huge hike in energy prices comes into effect.
As of 1 April, market regulator Ofgem has increased the energy price cap by 54 per cent.
It follows an announcement in February that customers on default tariffs who pay by direct debit would see an annual increase of £693, from £1,277 to £1,971 from 1 April. Pre-payment customers will see a hike of £708 from £1,309 to £2,017.
Ofgem estimates that the changes will affect 22 million customers.
Resolution Foundation, a think tank which focuses on improving living standards, said the increase will double the number of households experiencing “fuel stress” – those who spend at least 10 per cent of their total household budgets on energy bills – from 2.5 to five million households.
The foundation has urged the government to increase short-term financial support for lower income households and improve its wider energy strategy – such as better insulating for homes and reducing dependence on natural gases – so that households are “less exposed to future fossil-fuel price shocks”.
One way people are trying to combat rising energy prices is by making savvier decisions when it comes to their electricity usage.
Some energy providers offer tariffs which differentiate between “off-peak” and “peak” energy times, also known as Economy 7 or Economy 10 tariffs, with electricity used during off-peak hours costing less money.
Those worried about their bills may wish to talk to their provider to see if its something they offer.
Here’s everything you need to know about the tariffs.
What are Economy tariffs?
Economy 7 and Economy 10 tariffs offer rates that differ depending on what time you use electricity.
On an Economy 7 plan, you will pay less for electricity used for seven hours of the night, while on an Economy 10 plan you pay less for electricity used during a 10-hour period.
Power demands during these off-peak hours are usually lower, and so can be given at a discounted rate.
These plans require a different type of electricity meter than can display two readings – one for daytime use and one for use at night.
Economy hours will vary depending on where you live and who your provider is, but generally Economy 7 hours start between 11 PM and 1 AM and will last until 6AM to 8 AM.
Economy 10 tariffs give you off-peak energy for more hours. Unlike Economy 7, most Economy 10 plans provide three hours of cheaper electricity in the afternoon, and seven overnight.
How do I know if it’s right for me?
Whether or not a household should be on an Economy tariff depends entirely on their energy usage and habits.
Some suppliers who offer these tariffs charge Economy customers more expensive rates for any electricity used during the day than they normally would.
This means the Economy tariffs are not well suited to households which use a lot of energy during the day.
Customers should consider their electricity usage. If your home has a hot water tank that is heated electrically an Economy 7 tariff could be an affordable option, as it would allow water to be heated overnight for use during the day.
Additionally, if you have an electric storage heater, this heat could be stored and save costs during daylight hours.
Those with electrical appliances such as washing machines, dishwashers and electric vehicles may also want to consider an Economy tariff.
This is because these appliances can be used, and cars charged, during the night at a cheaper price.
Which providers offer Economy 7 tariffs?
Green Energy UK has introduced “TIDE” tariff. This gives customers lower electricity rates from midnight until 7 AM and encourages them against using energy during peak hours, between 4 PM and 8 PM.
Economy 7 tariffs are also offered by British Gas and OVO Energy.
E.ON is one of few energy suppliers which offers Economy 10 tariffs. Find out more on its website.
