Economy 7 Tariffs: pros, cons & common pitfalls

Cut your bills with smart night-time electricity use

Economy 7 rewards you for shifting energy-hungry tasks to the small hours. Get cheaper night rates, pricier day rates, and meaningful savings only if you can move enough usage after midnight. This guide explains how it works, who it suits, and how to avoid common mistakes [1][2][3].

Who benefits most - and who should avoid it

Economy 7 is best for electric-only homes, storage heaters, immersion tanks, or EV charging overnight. If you mainly use electricity during the day, work from home, or have gas heating with low night use, you may pay more overall due to higher daytime rates [1][2][4].

If you cannot hit roughly 40% night usage, think twice [1][5].

Key terms made simple

• Off-peak window: Typically midnight to 7am - your cheaper rate period. Hours vary slightly by supplier and region [1][6].
• Day rate: The higher daytime price per kWh on Economy 7 - often close to double some single-rate tariffs [2].
• Night rate: Cheaper price per kWh for seven hours at night - can be up to around 50% lower than standard rates [1][2].
• Dual-rate meter: A meter or smart meter that records day and night usage separately - required for Economy 7 [3].
• RTS meters: Older Radio Teleswitch meters supporting Economy 7 - being phased out by 30 June 2025. Smart meter upgrade required to maintain dual-rate tariffs [3][7].
• Usage split: The proportion of your electricity used at night vs day. Savings typically start when about 40% or more is off-peak [1][5].

A crucial idea: Economy 7 is a time-of-use structure. You trade lower night prices for higher daytime prices. Your savings hinge on how much you can push into the night window and how disciplined you are about daytime use.

Your tariff choices - and how they compare

Most GB suppliers offer a single-rate tariff, an Economy 7 dual-rate, and sometimes other time-of-use options. The right choice depends on your appliances, lifestyle, and ability to automate overnight usage.

Standout point: The supplier rate split varies widely. Always compare both day and night unit prices and the standing charge before switching [1][3][10].

What it could cost - and where savings come from

• Night usage can be substantially cheaper than standard rates, but daytime rates can be much higher. If you only manage around 10% at night, you could be worse off by roughly £180 per year vs a single-rate plan [2].
• Savings typically appear once you shift about 40% or more of usage into the off-peak window [1][5]. A typical home around this threshold could pay near £1,191 per year under the July 2025 cap, but outcomes vary by supplier and habits [5].
• Risks: running washing machines, dishwashers, or heaters during the day erodes savings quickly. Working from home with day-time appliances often tips the balance against Economy 7 [2][6].

Your real return depends on discipline: set timers, automate, and avoid daytime top-ups wherever possible.

Can you get it - and what you’ll need

• Meter requirement: You must have a dual-rate meter or a compatible smart meter that records separate day and night usage [3].
• RTS phase-out: If you rely on an RTS meter, you must upgrade to a smart meter by 30 June 2025 to keep dual-rate tariffs. Your supplier should facilitate this [3][7].
• Household profile: Electric storage heaters, hot-water immersion tanks, and EVs are strong candidates. Gas-heated homes with light night use usually do not benefit [1][4].
• Lifestyle fit: Off-peak hours are typically fixed at midnight to 7am - less suitable if your schedule is unpredictable or you need daytime power for work [6].

How to switch successfully - step by step

1. Check last 12 months’ usage - day vs night potential.
2. Identify night-ready loads - EV, hot water, laundry, heating.
3. Install or confirm a dual-rate smart meter.
4. Compare supplier day and night rates plus standing charge.
5. Model scenarios at 30%, 40%, 50% night usage.
6. Set timers and schedules for off-peak operation.
7. Monitor first two bills - adjust habits if needed.
8. Review annually or after lifestyle changes.

Upsides and trade-offs to weigh

Pros:

• Real savings if 40%+ of usage runs at night [1][5].
• Encourages efficient, grid-friendly habits and EV charging [2][8].
• Can align well with storage heaters and immersion tanks [4].

Cons:

• Day rates can be nearly double single-rate tariffs [2].
• Fixed night window may not suit families or home workers [6].
• Requires a compatible meter and, for some, an upgrade before June 2025 [3][7].

Avoiding costly mistakes

• Do not switch without checking your realistic night usage. If you cannot hit the threshold, stick with single-rate.
• Beware creeping day use: kettles, dryers, and top-up heating during peak hours wipe out savings quickly.
• Do not ignore the RTS deadline. Arrange your smart meter upgrade early to avoid bill and tariff disruption [3][7].
• Reassess after changes - new baby, remote work, or a new EV can swing the decision either way [9].

If Economy 7 is not a fit

• Competitive single-rate tariffs - simpler and often cheaper for day-heavy users.
• Smart time-of-use plans - more granular off-peak windows if you can automate.
• Home energy efficiency - insulation, draught-proofing, LED lighting, smart thermostats to cut overall consumption.
• Solar plus battery (where viable) - store cheap or free power for daytime use.

The cheapest kWh is the one you do not use.

Frequently asked questions

Q: Do all suppliers offer the same day-night split? A: No. Within Ofgem’s cap, suppliers set different day and night unit rates and standing charges. Compare carefully before choosing [1][3][10].

Q: Can I keep Economy 7 without a smart meter? A: Only if your existing dual-rate meter remains compatible. RTS meters must be replaced by 30 June 2025 to maintain dual-rate tariffs [3][7].

Q: What if my off-peak hours are not midnight to 7am? A: Some regions vary slightly. Your supplier will confirm the exact seven-hour window for your meter [1][6].

Q: How much night usage do I need? A: As a rule of thumb, around 40% night use is where savings typically begin, depending on rates and habits [1][5].

Q: Is Economy 7 good for EV owners? A: Often yes, if you charge mainly overnight and limit day use. Timers and smart chargers help ensure savings [4][8].

Q: Can I leave Economy 7 later? A: Yes. Review annually and switch if your pattern changes to avoid overpaying due to high day rates [9][10].

What to do now

• Check your usage split, appliances, and schedule. If you can move 40%+ into night hours, Economy 7 could work.
• Ask your supplier about a smart meter and confirm your off-peak window.
• Use Switcha to compare day and night rates across suppliers and model savings at different night-use percentages.

Small print you should read

This article is general guidance, not personalised advice. Tariffs and price caps change, and supplier terms vary. Validate figures with your supplier and use recent bills to model outcomes before switching.