Posted on 19th January 2018

Understanding energy tariffs

Energy prices can be tricky to understand. Confusing names, a lot of different prices, terms and contract lengths plus short- term discounts can make a decision choosing the best energy deal hard even for an expert.

Here at Angelic Energy we try to make everything a lot easier to understand to make sure you get the best deal for yourself.

What tariffs are available?

Energy suppliers usually offer three main types of tariffs:

  1. Standard variable tariff- this is a supply contract with no end date or fixed-term lower price cap. This is the energy suppliers basic (standard) offer and is usually more expensive than the other deals that available on the market. This means that suppliers can change the rate you pay at any time, subject to giving you a month’s notice. They will normally do this to reflect changes in market prices
  2. Pay As You Go – this is a payment option for customers who don’t pay bills or have direct debit set up. Instead, they use a key or card to top up the credit on their meter. For Pay As You Go customers with smart meters, they may also be able to do this online. Customers on pre-payment meters usually pay significantly more for their energy compared to those who pay by direct debit. Some suppliers do offer special deals for Pay As You Go customers but most of them do not.
  3. Fixed-term tariffs- these tariffs provide a locked-in price for gas and electricity for a fixed period of time, usually one year or more. This tariffs protects customers from price rises for the length of supply contract.

Advantages and disadvantages of fixed-term tariffs?

Fixed term tariffs offer the advantage of cheaper energy for longer period. Customers don’t have to worry about paying more for their energy for the length of the contract.  They are not locked with the supplier for fixed period, but they may have to pay a charge to leave early, which means they could miss out on cheaper deals from others suppliers. More importantly, when a fixed term contracts comes to the end, customers who forget to update their tariff or change supplier will usually be put to the standard variable tariff which is usually more expensive and will lead to an increase of energy bills or direct debit arrangements.

Does Angelic Energy protect customers from unexpected bills this winter?

Angelic Energy has just launched a new 18-month Fixed tariff which secures customers a lower price for gas and electricity for next two winters. A great advantage with the Angelic Energy deal is that when a customer comes to the end of their 18 month contract they will not be automatically switch to standard variable tariff. Instead they will be put on the cheapest available no-exit fee fixed tariff. This allows Angelic Energy customers to benefit from long- term cheaper energy prices so that they don’t have to keep switching between suppliers or tariffs every few months to get the best value.