Unlike with a fixed rate deal, with a standard variable tariff, the price per kilowatt hour that you’re paying may vary from month to month. Standard variable tariffs are typically the most expensive plans offered by any energy supplier and are most commonly used by people whose fixed rate deal has run out, or by people who have recently moved home to a new property. If you are unaware what kind of tariff you are on, the chances are it’s an SVT, and you should look into switching energy deal to make sure you get the best energy deal possible.
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Standard variable tariffs, or default tariffs, are the standard plans that energy providers will put you on if you’re not signed up for a fixed rate deal. In almost all cases, these are the most expensive energy deals you could be on. In May 2021, the difference between the average standard variable tariff and the cheapest tariff available was £151. Despite this, 54% of energy customers are currently on standard or default tariffs (excluding prepayment customers), according to the latest figures from Ofgem. 30% of energy customers have been on a default tariff for three years or more.
Variable rate means that the cost per unit of energy can change from month to month, depending on a number of market indicators. It’s important to note that what you pay each month might still change on a fixed rate deal as your usage changes, but the price per unit will remain the same.
Default or standard variable tariffs are generally reserved for customers who are new to a supplier because they’ve moved house and haven’t set up a new fixed rate plan, or for customers who’s fixed rate period has lapsed. There are a few exceptions to this – suppliers like Bulb only have one variable tariff that all customers are on.
If you don’t remember switching suppliers in the last year, or if you’ve never checked what tariff you’re on, it’s likely that you’re on an SVT.
Not really. Unless you’re with a supplier that only offers the one variable rate plan, it’s more or less guaranteed that by switching to a fixed rate plan you’ll save yourself money every month.
Using a variable tariff also makes it difficult to plan your monthly budget for energy because prices can fluctuate. In the event of significant price rises, you’ll find your monthly bill going up accordingly. It’s better to switch to a fixed rate plan as soon as possible to prevent this from happening.