A guide to Economy 7 tariffs

What is an Economy 7 tariff?

An Economy 7 tariff gives you a cheaper electricity rate during a seven-hour period at night, usually from midnight to 7am. However, it charges a higher rate during the day and is also known as a ‘time of use’ tariff.

Used the right way, Economy 7 could help you save money. For example, you might benefit if you use night storage heaters, always put on a late-night clothes wash or even have an electric car that you charge overnight.

But it’s typically only worth signing up for an Economy 7 tariff if you use at least 40% of your electricity at night. Otherwise, it could end up costing you more than a regular ‘single-rate’ tariff that most households are on. These charge you the same regardless of when you use electricity.

What is an Economy 7 meter?

An Economy 7 meter is a special ‘dual rate’ electricity meter that takes two separate readings: one at the off-peak night-time rate, and one at the more expensive peak daytime rate.

Modern Economy 7 meters receive a digital signal that switches it between the off-peak and peak rates, while older meters rely on a radio teleswitch service (RTS).

However, the RTS service is due to be turned off on 31 March 2024. This could affect the functionality of older RTS systems. If you have an RTS Economy 7 meter, you should contact your supplier about getting an upgrade before then.

What time does Economy 7 start?

Most energy providers set the ‘off-peak’ seven-hour period to run from midnight to 7am, and the more expensive rate to cover the rest of the day. But the times can vary between providers, so check with the supplier before you sign up.

How does Economy 7 work?

When you sign up for Economy 7, your energy supplier will need to install a special meter that takes two separate readings for off-peak and peak hours.

Be sure to send the meter readings to your provider or you may get an estimated bill, which could be inaccurate and might lead to you being over or under-charged.

With Economy 7 it’s also important to make a note of your off-peak times as they may vary by a few minutes each day.

Providers do this to stop all their Economy 7 customers switching on appliances at the same time and overloading the grid.

Who might benefit from an Economy 7 tariff?

People who tend to use more energy at night might benefit from these tariffs. For example:

• You home is all electric and not connected to the gas supply

• You’re a ‘night owl’ and watch TV or play computer games into the small hours

• You work night shifts and use appliances such as your washing machine and oven late at night

• You have a timer on your washing machine or dishwasher so you can set them to start during the off-peak period

• You charge an electric car overnight – although it could be worth comparing specific tariffs for this.

• You have a hot water tank and storage radiators that heat up overnight and use the residual heat during the day. It’s particularly helpful if your night storage heaters and tank are on a separate electrical circuit that switches on as the economy period off-peak rate starts.

One word of warning though, the fire service recommends that you don't run tumble dryers unattended overnight because of the fire risk.

How can I save with Economy 7?

Economy 7 night rates can be up to 50% cheaper than day rates depending on your supplier. But whether you’ll benefit depends on your habits and when you use electricity.

Used properly, they could save you money. But whether you’ll benefit depends on your energy-use habits.

Here are our top tips to help you maximise your savings on an Economy 7 tariff:

• Insulate – if you’re using a hot water immersion tank that gets heated overnight, make sure your tank is well insulated so you’re not wasting energy. A thicker immersion jacket could be a good investment.

• Double-check your off-peak hours – Economy 7 times vary between providers, so make sure you know the exact time when off-peak switches to peak rate.

• Be alert to when the clocks change – if your Economy 7 meter is set to GMT all year round, make a note of when the off-peak hours are during BST.

• Maximise your night-time usage – if possible, aim to use 40-50%+ of your electricity during off-peak hours. Set your dishwasher, washing machine and anything that needs charging to be done at night.

• Invest in energy-efficient appliances – appliances with an energy rating above A are the most energy-efficient. Most modern appliances also have an eco-mode setting, which can help save even more energy.

• Cut down on your energy usage – no matter what the time of day or night, monitoring your energy usage and taking steps to cut down can help you save money and reduce your carbon footprint. Check out some of our top energy-saving tips.

• Check the tariff is working for you – keep an eye on your bills to see if your Economy 7 tariff is helping to keep bills down. There are far more regular single-rate tariffs available than Economy 7. Depending on your lifestyle and how you use your appliances, you might find one that offers better value based on your energy needs.