A guide to Economy 7 tariffs
An Economy 7 tariff is designed to give you a cheaper electricity rate at night and off peak, and a more expensive rate during peak demand hours.
Used properly, it could save you money. But whether you’ll benefit or not depends on your energy use habits.
Read on to find out if Economy 7 is the right type of electricity tariff for you.
An Economy 7 tariff is designed to give you a cheaper electricity rate at night and off peak, and a more expensive rate during peak demand hours.
Used properly, it could save you money. But whether you’ll benefit or not depends on your energy use habits.
Read on to find out if Economy 7 is the right type of electricity tariff for you.
What is an economy 7 tariff?
An Economy 7 tariff is also known as a ‘time-of-use’ tariff. It will give you a cheaper rate during a seven-hour period when you’re least likely to be using energy – typically during the night.
Used the right way, Economy 7 could help you save money. For example, you might benefit if you use night storage heaters or have an electric car that you charge overnight.
An Economy 10 tariff is also a ‘time-of-use’ tariff that has 10 hours of the cheaper rate rather than 7.
However, you need to be sure that you’ll make the most of the off-peak hours, otherwise it could end up costing you more than a single-rate tariff.
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 rate, and one at the more expensive peak 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. If, for example:
- You’re a ‘night owl’ and watch TV or play computer games into the small hours
- You charge your gadgets overnight or have a timer on your washing machine or dishwasher so they 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.
It’s typically only worth signing up for an Economy 7 tariff if you use around 40-50% of your electricity at night. You also have to remember to be organised about your usage to maximise the benefits — for example, having timers for particular appliances.
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 tariffs are designed to give you a cheaper electricity rate during off-peak hours and a more expensive rate in peak periods during the day.
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.
- Don’t forget when 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 overnight.
- 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.
- Switch energy suppliers – there are far more single-rate tariffs available than Economy 7. By shopping around when you are able to, you might find a tariff that offers better value based on your energy needs.
- 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.
Is Economy 7 worth it?
Ultimately, we all want to save money on our energy bills, so it all boils down to whether an Economy 7 tariff could help you achieve this.
If your home primarily runs on electricity and much of that consumption can be shifted to the night hours, then Economy 7 may well be worth considering.
But if your overall electricity usage is fairly low, and you habitually consume more during the day than at night, then a single-rate tariff may offer better value for money.
Frequently asked questions
Can I get a smart meter with Economy 7?
Yes, you can, but not all energy providers offer this, so your choices may be limited. If you can get one, it should help you see what you’re being charged under the different rates of the tariff. Hopefully this would make it easier for you to check that the tariff is still working for you.
What happens with Economy 7 when the clocks change?
Some Economy 7 meters are set to Greenwich Mean Time (GMT) all year round. If your meter doesn’t adjust to British Summer Time (BST) at the end of March, you could be using electricity at the peak rate without realising it.
Contact your supplier to find out exactly when the peak and off-peak periods are during BST.
This change in hours could make a big difference to the amount you save, depending on your pattern of use, so make sure you regularly review whether the tariff is still working for you.
Can you get an Economy 7 tariff for gas?
No, there aren't any Economy 7 and 10 gas tariffs. You can only get an Economy 7 or 10 tariff for electricity.
What is an Economy 10 tariff?
An Economy 10 tariff is also a ‘time-of-use’ tariff that has 10 hours of the cheaper rate rather than 7.
Only here, your off-peak periods may be divided throughout the day and night. For example, you may get a five-hour off-peak period during the night and one three-hour and one two-hour off-peak period during the day.
Economy 10 gives you the flexibility of more daytime off-peak hours. However, there are very few tariffs available – even fewer than Economy 7.
Sajni Shah - Consumer expert on utilities and money
Sajni is passionate about building products, allowing Compare the Market to help you make great financial decisions. She keeps track of the latest trends and evolving markets to find new ways to help you save money.