Eleven million households with smart meters could soon see their electricity prices double between 4pm and 8pm on weekdays. That is the scale of the shift being consulted on by Ofgem, as reported by the Telegraph and Argus. The change is not hypothetical, it is already happening. Octopus Energy’s Agile tariff, for example, has seen peak rates hit 60p/kWh while off-peak drops to 5p/kWh. For a typical 3-bed semi using 8,000 kWh a year, that means a winter evening could cost £4.80 for three hours of heating, cooking, and lighting, versus 40p for the same usage at 2am.
Who qualifies, and who doesn’t
Time-of-use tariffs are only available to homes with smart meters that record half-hourly consumption. Ofgem estimates 11 million homes now have such meters, up from 8 million in 2023. But not everyone can switch. Those on prepayment meters, or with health conditions requiring constant heating or medical equipment, can request an exemption. The energy regulator confirmed to MoneySavingExpert last month that suppliers must offer a standard time-of-use tariff to any smart meter customer who asks, but cannot force them onto one without consent, at least until 2026.
Yet the direction of travel is clear. National Grid’s Future Energy Scenarios report, published in July, assumes 80% of homes will be on time-of-use tariffs by 2035. The logic is simple: the grid is under most strain between 4pm and 8pm, when solar generation falls and demand spikes. Shifting just 10% of peak demand to off-peak could save the system £200m a year in avoided gas plant running costs, savings Ofgem says should be passed to consumers.
What it costs a typical 3-bed semi
The headline figure is stark. Under a typical time-of-use tariff from a Big Six supplier, the peak rate is around 45p/kWh compared with 22p/kWh off-peak. That is double. For a household running a 3kW electric heater, a 2kW oven, and lights for three hours, the peak bill is £4.05. The same usage at night costs £1.98.
But the arithmetic works both ways. A family with an electric car charging overnight at 7p/kWh instead of 45p/kWh saves £1.52 per 10kWh charge, about £550 a year if they charge every night. Heat pump owners can preheat their homes during cheap off-peak hours and store the heat in a buffer tank or underfloor slab. Energy Saving Trust estimates that a typical 3-bed semi with a heat pump on a time-of-use tariff can cut annual heating costs by 15-20%, or roughly £150-£200.
The catch is that you must change your habits. Washing machines, tumble dryers, and dishwashers need to run after 10pm or before 6am. That is not always practical for families with young children or shift workers. Suppliers are starting to offer app-based scheduling, but the technology still requires the user to set timers or accept delayed starts.
How to check your tariff, and what to do next
First, check if your smart meter is sending half-hourly readings. You can do this through your supplier’s online portal or by calling them. If it is, ask if they offer a time-of-use tariff. Octopus Energy and EDF are the most advanced, with Agile and GoElectric tariffs respectively. British Gas and E.ON have pilot schemes but no national rollout yet.
Second, calculate your peak usage. Most homes use 30-40% of their daily electricity between 4pm and 8pm. If you can shift even half of that to off-peak, say by running the dishwasher at 10pm instead of 7pm, you could save £80-£120 a year. If you have an EV or heat pump, the savings multiply.
Third, consider a smart home system. A simple timer plug costs £10. A whole-home energy management system like Hive or Tado can automate heating and appliance schedules based on real-time prices. The upfront cost is typically £150-£300, but the payback is under two years for high-usage households.
Finally, act before 2026. Ofgem’s consultation on mandatory time-of-use tariffs closes in March 2025. If you wait until they are forced on you, you may not have time to adjust your habits or install smart controls. The window to choose your own tariff and schedule is now.
Frequently Asked Questions
Not yet. Ofgem is consulting on making them mandatory by 2026, but currently you can only switch to one voluntarily. If you have a health condition or prepayment meter, you can request an exemption.
Yes, but the savings are smaller, typically £80-£120 a year for shifting washing, drying, and dishwashing to off-peak hours. The bigger savings come from EV charging and heat pump preheating, which can exceed £500 a year.
