Direct debit customers have traditionally been offered the cheapest tariffs, followed by standard credit customers and then those using prepayment meters. From April 2017, the same month the prepayment safeguard tariff was introduced, to March 2018 (with the exception of February 2018), the cheapest tariff for customers of the large six suppliers using prepayment meters has been below the cheapest tariff for standard credit customers of the large six suppliers.
For the market as a whole, the cheapest tariff for customers using prepayment meters was lower than the cheapest tariff for standard credit customers in three of the last four months
A prepayment safeguard tariff was introduced on 1 April 2017, limiting the amount that suppliers can charge their prepayment customers. We extended the safeguard tariff to a further one million vulnerable customers in receipt of the government’s Warm Home Discount on 2 February 2018. For more information on the impact of the safeguard tariff, please see here.
Relevance and further information
This indicator helps us understand pricing by payment methods, as well as how much other suppliers are able to compete with the six large suppliers for each method.
We calculate the bill values associated with the different tariff types using a ‘typical medium domestic consumer’. As of October 2017, typical consumption values for a medium consumer are 12,000kWh/year for gas and 3,100kWh/year for electricity (profile class 1). The chart includes collective switching tariffs from Q1 2016.
All tariffs shown in the chart are for a dual fuel customer. Dual fuel refers to a situation where a customer takes gas and electricity from the same supplier.
Tariffs with limited availability depending on customer features (for example, tariffs which are only available to new customers, also known as ‘acquisition’ tariffs, or tariffs restricted to certain regions) are excluded from the calculation to make sure that all tariffs considered are generally available to all customers across GB.
Tariffs available with white label suppliers are included in the calculation of the cheapest tariff. White label suppliers are organisations without supply licences that partner with an active licensed supplier to offer gas and electricity using their own brand.