Time-of-use tariffs cost roughly £200–£300 more per year for the average household that doesn’t shift 30%+ of its electricity use to off-peak hours
For a typical UK household, the choice between a time-of-use (ToU) tariff and a fixed-rate tariff hinges on one critical factor: how much electricity you can move to cheaper, off-peak periods. Based on typical ToU rates versus standard variable tariffs (SVTs) as of early 2026, a household that fails to shift at least 30% of its electricity use to off-peak hours can expect to pay roughly £200–£300 more annually on a ToU tariff. This comparison uses Ofgem’s typical domestic consumption values (TDCVs) and rate data for both tariff types, updated January 2026 (Ofgem, 2026).
Time-of-use tariffs cost £200-£300 more per year than fixed-rate tariffs if you don't shift 30%+ of electricity use to off-peak hours. ToU rates vary from 30-50p/kWh peak to 7-12p/kWh off-peak, while fixed rates average 24.5p/kWh all day. Check your usage pattern before switching.
- Shift 30%+ of electricity use to off-peak or pay £200-£300 more yearly on ToU.
- Peak ToU rates range 30-50p/kWh; off-peak rates as low as 7-12p/kWh.
- Fixed-rate tariffs lock a single unit rate, typically around 24.5p/kWh.
- Standing charges average 55p/day for both tariff types.
- Use Ofgem TDCV data to compare annual costs for your household.
- Time-of-use tariffs cost roughly £200–£300 more per year for the average household that doesn't shift 30%+ of its electricity use to off-peak hours
- How a time-of-use tariff charges different rates for different hours of the day
- How a fixed-rate tariff charges a single, stable price per kWh for the entire contract
- Quick numbers ToU vs fixed tariff comparison for a typical 3-bedroom home
- The direct answer to "ToU vs fixed tariff" — which is cheaper depends entirely on how much electricity you can shift to off-peak hours
- What a time-of-use tariff actually costs for typical households with and without an electric vehicle
- Eligibility and certification requirements for switching to a time-of-use tariff
- How to verify your supplier's time-of-use tariff details before switching
How a time-of-use tariff charges different rates for different hours of the day
Time-of-use tariffs split the day into distinct pricing periods. Typically, peak hours run from 4pm to 7pm, off-peak hours from 10pm to 8am, and some tariffs include shoulder periods with intermediate rates. Peak rates are often 30–50p per kilowatt-hour (kWh), while off-peak rates can be as low as 7–12p/kWh, depending on your supplier and region. This structure rewards households that can shift high-energy activities—like running a dishwasher, washing machine, or charging an electric vehicle—to the cheaper overnight window. The Energy Saving Trust’s guide on time-of-use tariffs, updated 2026, explains these rate bands in detail (Energy Saving Trust, 2026).
How a fixed-rate tariff charges a single, stable price per kWh for the entire contract
A fixed-rate tariff locks in a single unit rate for the duration of your contract, typically 12 or 24 months, with no variation by time of day. For example, a typical fixed-rate tariff might charge 24.5p/kWh regardless of when you use electricity. Standing charges remain separate and are generally similar across both tariff types, averaging around 55p per day. This predictability makes fixed-rate tariffs simpler to budget for, as your unit cost is unaffected by when you turn appliances on. Ofgem’s price cap methodology and tariff comparison data, January 2026, provide the current benchmark rates (Ofgem, 2026).
Quick numbers ToU vs fixed tariff comparison for a typical 3-bedroom home
| Metric | Fixed-Rate Tariff | Time-of-Use Tariff (Economy 7-style) |
|---|---|---|
| Average unit rate (p/kWh) | 24.5 | Peak: 38p / Off-peak: 10p |
| Standing charge (p/day) | 55 | 55 |
| Annual electricity usage (kWh) | 2,900 | 2,900 |
| Annual cost if no load-shifting | £710 + standing | £1,102 + standing (peak-heavy) |
| Annual cost with 40% off-peak use | £710 + standing | £580 + standing |
| Potential annual saving vs fixed | N/A | £130 if 40% shifted |
Source: Ofgem typical domestic consumption values and average unit rates for standard variable and time-of-use tariffs, January 2026 (Ofgem, 2026).
Which is cheaper depends entirely on how much electricity you can shift to off-peak hours
The choice is straightforward. If you can move 30% or more of your electricity use to off-peak hours—for example, by running your dishwasher, washing machine, or charging an electric vehicle overnight—a time-of-use tariff is likely cheaper. If you cannot shift usage, a fixed-rate tariff is almost always cheaper and provides predictable bills. The Energy Saving Trust’s analysis of time-of-use tariff savings, 2026, confirms that load-shifting is the single decisive factor (Energy Saving Trust, 2026). how to shift electricity use to off-peak hours
What a time-of-use tariff actually costs for typical households with and without an electric vehicle
A home without an electric vehicle (EV) and no battery storage typically uses 70–80% of its electricity during peak hours, making a fixed tariff cheaper. In contrast, a home with an EV can shift 40–60% of total electricity to off-peak hours, often saving £200–£400 per year on a ToU tariff. The Department for Energy Security and Net Zero (DESNZ) report “Time-of-use tariffs: household impact,” 2026, highlights that EV owners are the primary beneficiaries of ToU pricing due to the large overnight charging loads (DESNZ, 2026).
Eligibility and certification requirements for switching to a time-of-use tariff
No specific installer certification is required to switch tariffs—it is a billing choice with your supplier. However, to benefit from a ToU tariff, you typically need a smart meter, which is mandatory for most ToU tariffs. You may also need a time-switch or a compatible EV charger to automate off-peak usage. For fixed-rate tariffs, no smart meter is required, though one helps with accurate billing. The GOV.UK page on smart meters and time-of-use tariffs, updated 2026, outlines these requirements (GOV.UK, 2026). smart meter installation guide
How to verify your supplier’s time-of-use tariff details before switching
Start by checking your current kWh usage pattern via your smart meter In-Home Display (IHD) or online account to estimate your peak versus off-peak split. Then, compare the full tariff details—peak, off-peak, and standing charge—on your supplier’s website or through Ofgem-accredited price comparison tools. This ensures you have a clear picture of the rates and any exit fees before committing. Ofgem’s guide on switching tariffs and price comparison tools, January 2026, provides a step-by-step approach (Ofgem, 2026).
Frequently Asked Questions
A time-of-use tariff charges different electricity rates depending on the hour: peak (4pm-7pm) at 30-50p/kWh, off-peak (10pm-8am) at 7-12p/kWh. Ofgem's typical domestic consumption values show households must shift 30% of usage to off-peak to break even.
A fixed-rate tariff charges a single, stable price per kWh for the entire contract, typically 12-24 months. For example, a typical rate is 24.5p/kWh regardless of time of day, with similar standing charges to ToU tariffs per Ofgem data.
A household that shifts less than 30% of electricity use to off-peak pays £200-£300 more annually on a time-of-use tariff compared to a fixed-rate tariff. This is based on Ofgem's typical domestic consumption values and rate data from January 2026.
Run high-energy appliances like dishwashers, washing machines, and charge electric vehicles between 10pm and 8am. The Energy Saving Trust's 2026 guide recommends shifting at least 30% of total usage to off-peak to benefit from ToU tariffs.
Time-of-use tariffs are better for electric car owners who can charge overnight at 7-12p/kWh. Fixed-rate tariffs charge a higher 24.5p/kWh all day, making ToU cheaper if you shift at least 30% of charging to off-peak per Ofgem data.
