Economy 7 Tariffs: do you really need it?

Make your electricity cheaper while you sleep

Introduction

Economy 7 splits your electricity into two prices: a cheaper night rate and a costlier daytime rate. If you can push enough usage overnight, it can trim your bill. If not, you could pay more. Here is a practical, GB-focused guide that explains the trade-offs and how to decide with confidence.

The right tariff is the one that fits your usage pattern, not just the cheapest headline rate.

Aim for at least 40% of your electricity at night to make it work.

Who should consider it

Economy 7 suits homes that can schedule significant usage overnight - think storage heaters, immersion heaters, EV charging or running appliances while you sleep. If you are at home during the day or use high-powered devices for work, the higher daytime rate can wipe out savings. Gas-heated homes see less benefit, as Economy 7 applies to electricity only.

The foundations you need to know

Key concepts and terminology

• Off-peak window: Typically seven hours overnight, often between 00:30 and 07:30. Your supplier sets the exact times.
• Night rate: Usually 20-33% cheaper than the day rate. Typical off-peak costs are about 7-12p per kWh.
• Day rate: Higher than standard single-rate tariffs, often 25-30p per kWh. This is where costs can climb if you cannot shift usage.
• Split usage: The share of your electricity you use overnight. Around 40% or more at night is the usual tipping point for savings.
• Price cap: Ofgem caps overall unit rates and standing charges, but suppliers choose their day and night splits within the cap. Outcomes vary by supplier and your usage pattern.
• Suitable homes: Best fits include properties with electric storage heaters, immersion heaters or EVs you can charge overnight. Homes with gas heating or heavy daytime use may not benefit.
• Smart meters: Make Economy 7 simpler by tracking day and night use accurately, reducing billing errors and helping you optimise your schedule.

Understanding the split matters more than the headline price.

Your choices at a glance

Tariff types compared

What varies by supplier

• Exact off-peak times
• The gap between day and night rates
• Standing charge
• Smart time windows with some smart meters

Because suppliers price the split differently under the price cap, two Economy 7 deals can yield very different bills for the same household.

Pounds and pence: what it means for your bill

Cost, impact, returns and risks

• Under the July 2025 price cap, a typical home using 3,900 kWh a year with 42% at night pays about £1,191 on Economy 7. Your result depends on the supplier’s split and your actual usage.
• Daytime rates can approach 30p per kWh, nearly double the night rate. Heavy daytime use can erase savings.
• Potential savings are modest for many households, often up to about £45 per year if you optimise overnight usage. Without shifting enough demand, savings can be minimal or negative.
• Smart meters help you avoid misreads, track your day-night split and tweak habits to protect savings.

If you cannot reliably move at least 40% of use to night, think twice.

Do you meet the profile?

Eligibility and suitability

• Metering: You need a compatible meter set up for a day and night register. Smart meters usually handle this cleanly.
• Property and appliances: Homes with electric storage heaters, immersion heaters or EVs are prime candidates. Gas-heated homes gain less because most consumption is not shiftable to night.
• Lifestyle: Shift-friendly routines matter. Overnight laundry, dishwasher cycles and EV charging make the maths work. Home workers with heavy daytime use may pay more overall.
• Safety and practicality: Only run appliances overnight if they have delay timers, are well maintained and follow safety guidance. Use smart plugs and scheduling features where available.

The more automation you have, the easier it is to keep the savings.

Put it into practice

Step-by-step to decide and switch

1. Check your last 12 months of kWh usage and patterns.
2. Estimate what percentage you can move overnight.
3. Verify your meter type and smart meter status.
4. Compare Economy 7 quotes by day rate, night rate and standing charge.
5. Model costs at 30%, 40% and 50% overnight usage.
6. Schedule appliances and EV charging to off-peak windows.
7. Track your split monthly via your smart meter app.
8. Recheck tariffs every 6-12 months.

The trade-offs in plain sight

Pros and cons

• Pros:
  • Cheaper night rate rewards planned usage
  • Works well with storage heaters, immersion heaters and EVs
  • Encourages energy-efficient habits and reduces peak demand
  • Smart meters improve accuracy and control
• Cons:
  • Daytime rate can be significantly higher than standard tariffs
  • Savings often modest and depend on reaching at least 40% night use
  • Fixed off-peak hours may not suit varied family schedules
  • Not helpful if you have gas heating and low electric usage

Read this before you switch

Watch-outs and common pitfalls

• Comparing only the night rate: the high day rate matters more if you are at home during the day.
• Assuming your off-peak window: confirm the exact hours with your supplier.
• Ignoring the standing charge: it can tilt comparisons between suppliers.
• Overestimating shiftable usage: be conservative. Test your schedule for a week.
• Skipping a smart meter: manual reads can cause billing errors and missed savings.

Model three scenarios: worst case, expected, best case. Choose based on the middle.

If Economy 7 is not a fit

Alternatives worth a look

• Single-rate electricity: Best if your usage is spread across the day.
• Economy 10: Offers more flexible off-peak windows, though fewer suppliers support it.
• Time-of-use smart tariffs: Some suppliers offer multiple time bands or EV-focused deals. Check compatibility and availability.
• Energy efficiency: LED lighting, insulation, and appliance upgrades reduce total kWh regardless of tariff.

Questions people ask

FAQs

• How do I know my off-peak hours? Your supplier confirms the exact window, often around 00:30 to 07:30. Smart meters apply the correct times automatically.
• Can I save if I work from home? It is harder. Higher daytime rates mean you must push substantial usage to night to come out ahead.
• Do I need a new meter? Many homes can switch using their existing meter. A smart meter usually makes readings and billing more accurate and simpler.
• What if I have gas heating? Economy 7 only affects electricity. If most of your energy is gas, the benefit is limited.
• How much could I save? Often up to about £45 per year if you reach around 40% night usage. Without that, you may save little or pay more.
• Is Economy 10 better? It can be for some, thanks to daytime off-peak slots, but availability is limited and pricing varies.

What to do next

• Gather 12 months of kWh data from bills or your smart meter app.
• Map what you can reliably shift overnight: EV charging, immersion heating, laundry, dishwashing.
• Compare at least three Economy 7 quotes and a single-rate tariff. Model costs at 30%, 40% and 50% overnight usage.
• If the numbers look marginal, prefer a single-rate plan while you improve efficiency.

Important information

This guide is general information for GB households and not personal advice. Tariff structures, off-peak times and price cap levels change. Always check current supplier terms, rates and your own usage data before switching.