Economy 7 Tariffs vs alternatives: which is right for you?

Smart savings or costly mistake?

Economy 7 offers cheaper electricity at night and higher rates by day. It suits homes that can shift at least 40% of usage to overnight. If you mainly use power in daylight hours, you could pay more than on a single-rate tariff. This guide sets out who benefits, how to check your usage, and the alternatives.

The right tariff depends on your routine, your meter, and your appliances.

Who benefits most

Households with storage heaters, electric hot water tanks, or regular overnight EV charging are prime candidates. If you work standard hours and run appliances in the evening, you need strong discipline or smart timers to push usage into the night window. Hybrid or work-from-home households that rely on daytime power typically save more on a single-rate tariff.

Key terms made simple

• Economy 7 - A dual-rate electricity tariff with roughly seven off-peak hours overnight, often midnight to 7am, and a higher rate during the day.
• Single-rate tariff - One unit price at all times of day.
• Economy 10 - A less common dual-rate option offering about ten off-peak hours split across day and night.
• Dual-rate meter - A meter that records separate day and night use. Many smart meters can do this.
• Smart meter - A device that sends readings automatically and can be configured for time-of-use tariffs.
• Radio Teleswitch (RTS) - Legacy technology used to control some off-peak meters and heating circuits. RTS is being phased out from June 2025, so affected homes will need smart meter upgrades.
• Night fraction - The share of your electricity used during off-peak hours. Aiming for 40% or more is a useful rule of thumb for Economy 7 to pay off.

Why these matter: Night rates can be up to around 50% cheaper than standard pricing, but day rates can be significantly higher. Understanding your night fraction and meter setup is central to avoiding bill shock.

Your choices at a glance

Standout point: If your night fraction is under 40%, single-rate usually wins.

Remember suppliers set their own day and night rates within Ofgem’s price cap. For a typical Economy 7 home using about 42% at night, an illustrative annual cost under the July 2025 cap is around £1,191 - but deals vary, so compare.

Pounds and pence - what to expect

• Savings potential - If you can shift laundry, dishwashing, hot water and EV charging into the night window, you may capture meaningful savings versus a single-rate plan.
• Risk of higher bills - Daytime rates on Economy 7 can be nearly double some single-rate prices. Using less than 40% at night can add roughly £180 per year compared with a single-rate tariff.
• Lifestyle impact - Success relies on planning. Smart plugs, appliance timers and EV scheduling help you automate usage while you sleep.
• Price cap context - Ofgem caps typical annual costs, not individual unit rates. Suppliers still vary widely on day and night pricing, so shopping around is essential.

If most of your consumption is 7am to 11pm, a single-rate is usually simpler and cheaper.

Who qualifies and meter must-haves

• Compatible meters - You need a dual-rate setup. Smart meters can usually be reconfigured remotely. Older two-rate meters work but may need replacement.
• RTS switch-off - From June 2025, RTS-controlled meters and circuits are being retired. Your supplier should arrange a smart meter upgrade to keep dual-rate functionality and accurate billing.
• Property type - Economy 7 is well matched to all-electric homes, flats with storage heaters, or properties without gas heating.
• Technology fit - EV owners and homes with electric hot water tanks often hit the 40% night threshold. Gas-heated homes with modest electric use may struggle.
• Lifestyle fit - WFH or hybrid routines often require heavy daytime usage. That reduces the value of Economy 7.

Tip: Check your last 12 months of readings if available. Many smart meter apps show day vs night breakdowns.

Make the move - a simple plan

1. Check your meter type and tariff on your bill.
2. Review day vs night usage for the last 3 to 12 months.
3. Estimate your night fraction - aim for 40% or more.
4. Trial timers on laundry, dishwasher, immersion heater and EV.
5. Compare quotes for Economy 7, single-rate and Economy 10.
6. Confirm your meter supports your chosen tariff.
7. Switch with your supplier and set smart schedules.
8. Recheck usage after 1 to 2 billing cycles.

Upsides and trade-offs

Pros

• Cheaper night rates can materially cut bills with the right habits.
• Ideal for storage heaters and overnight EV charging.
• Smart meters and apps make scheduling easier.

Cons

• Day rates can be much higher - miss the night window and costs rise.
• Requires lifestyle flexibility and reliable timers.
• Availability of Economy 10 is patchy by region and supplier.

Bottom line: Strong night usage unlocks value. Day-heavy patterns do not.

Pitfalls to avoid

• Ignoring day rates - A bargain night rate can be outweighed by expensive daytime units.
• Overestimating night usage - Be honest about your routine before switching.
• Delaying meter upgrades - RTS phase-out means action is needed to keep dual-rate billing.
• Not comparing suppliers - Rates vary within the price cap. Annual costs can differ meaningfully.
• Safety first - Only run appliances overnight if manufacturer guidance allows and you can do so safely.

Review your tariff at least annually or after major lifestyle changes.

If Economy 7 is not a fit

• Single-rate tariffs - Simple pricing suits most households with daytime-heavy use and hybrid work patterns.
• Economy 10 - Extra off-peak hours spread across the day can help varied schedules, but availability is limited.
• EV-specific off-peak deals - Some suppliers offer tailored night windows for charging, sometimes cheaper than standard Economy 7 structures.
• Demand-shifting tech - Smart thermostats, storage heaters with better controls, and battery storage (where viable) can improve off-peak utilisation.

Questions people ask

• Will a smart meter reduce my bill automatically? - No. It enables accurate billing and time-of-use pricing, but savings come from shifting usage.
• How do I know my night window? - Check your plan details or ask your supplier. Many set midnight to 7am, but times vary by region and provider.
• Is Economy 7 worth it without storage heaters or an EV? - Possibly, if you can automate enough heavy loads overnight, such as hot water and laundry.
• What if I work from home? - Daytime use tends to be higher. A single-rate tariff is often cheaper for WFH households.
• Can I switch back later? - Yes. With a smart meter it is usually straightforward to reconfigure, though some older meters may need replacing.
• Are rates the same across suppliers? - No. The price cap limits a typical bill, not unit prices, so day and night rates differ. Always compare.

Where to go from here

• Gather 3 to 12 months of usage data and estimate your night fraction.
• Use smart plugs and appliance timers to test overnight scheduling for a week.
• Compare Economy 7, single-rate and Economy 10 quotes with your current meter details.
• Speak to your supplier about smart meter options and the RTS deadline.

Small changes in when you use power can deliver large savings if the tariff matches your lifestyle.

Important information

This guide is general information for GB households and not personalised advice. Tariffs and unit rates change frequently. Always check current prices, your meter compatibility and safety guidance before switching or scheduling appliances overnight.