Begin with your own numbers, not the advertised saving

It is tempting to switch to the tariff with the biggest “save up to” figure. But that number is usually based on a household that may not look like yours. Before you compare anything, find your last 12 months of bills or your online account and note two figures for each fuel: your annual usage in kilowatt hours (kWh) and how you pay. A one-bedroom flat using 1,800 kWh of electricity and 8,000 kWh of gas will feel a high standing charge far more than a family in a draughty four-bed house using three times as much.

If you have smart meter data or monthly readings, even better. Add them up. That annual kWh figure is the backbone of every honest comparison. Ignore it and you are guessing. A tariff that looks cheap for a low user can be expensive for a high user, and vice versa.

Standing charges: the daily cost before you switch anything on

Every tariff has a standing charge: a fixed daily amount in pence that covers keeping you connected and, in some cases, servicing old meters or supporting social schemes. It appears on your bill as p per day and is charged whether you use any energy or not. Over a year, a standing charge of 50p a day is about £182.50; 70p a day is about £255.50. That difference alone can wipe out a headline discount.

Standing charges also vary by region, meter type, and payment method. Two tariffs with the same unit rate can have very different daily charges. Check the standing charge for both gas and electricity, because they are often different. A low electricity standing charge does not mean the gas standing charge is low too.

• Low users: a cheaper standing charge often matters more than a cheap unit rate.
• High users: a lower unit rate usually wins, even if the standing charge is higher.
• Seasonal homes or empty periods: check whether you can pause or reduce standing charges; many cannot.

Unit rates, payment methods, and the shape of your usage

Unit rate is the price you pay for each kWh of gas or electricity, shown as p/kWh. A tariff with a low unit rate but a high standing charge may look cheap in a headline, but the total depends on your usage. For example, a tariff at 22p/kWh with a 60p daily standing charge and another at 25p/kWh with a 35p daily standing charge can swap places depending on whether you use 2,000 kWh or 4,000 kWh a year. Do the full sum, not half of it.

Payment method changes the price. Direct debit is usually cheapest because it spreads cost and reduces admin. Quarterly cash or cheque, prepayment meters, and paper bills often carry higher rates or additional charges. If you are on a prepayment meter, ask whether a smart prepayment meter could give you more tariff choices, but compare the standing charge carefully.

Also check whether the tariff is single-rate or two-rate. Economy 7 or 10 gives cheaper overnight electricity but a higher day rate and usually a higher standing charge. If you run storage heaters, an electric vehicle, or heavy appliances overnight, the maths can work. If you do not, it usually does not.

Contract length, exit fees, and what happens at the end

Fixed tariffs lock your unit rates and standing charges for a set period, often 12 or 24 months. They give certainty, but they are not a guarantee that you are getting the best deal. Variable tariffs follow the market and can rise or fall; they usually have no exit fees but less predictability.

Look for the exit fee, sometimes called a termination fee. It is charged per fuel if you leave early, often £25 to £50 per fuel. If you plan to move home, or you think prices may fall, a long fixed deal with steep exit fees can be a trap. Check the notice period too. Some fixed deals roll onto a more expensive variable tariff if you do nothing at the end of the term. Put a note in your diary four to six weeks before the end date.

Read the fine print for discounts that are not what they seem

Many tariffs advertise a discount that only applies if you tick several boxes. Read the terms before you switch, because a £30 annual discount is easily cancelled out by a higher standing charge or a payment fee. Look for these common conditions:

• Dual fuel discounts: only apply if you take both gas and electricity from the same supplier.
• Paperless billing: requires an online account and email; a paper bill may cost extra.
• Bundle or loyalty offers: may tie you to a longer contract or a product you do not need.
• Smart meter requirements: some tariffs require one, and installation may not suit your home.
• Minimum usage or top-up conditions: unusual, but they exist on some prepayment and time-of-use deals.
• Late payment or security deposit: missing a payment can remove a discount or add a fee.

Compare total annual cost in five practical steps

The only fair comparison is the total annual cost for your own usage. Use this routine every time you shop around:

• Step 1: Write down your annual kWh for gas and electricity separately.
• Step 2: For each tariff, multiply the unit rate by your kWh, then add the standing charge multiplied by 365.
• Step 3: Add any fees, such as exit fees if you may leave early, and subtract only the discounts you will definitely qualify for.
• Step 4: Check the contract length, notice period, and what happens when the deal ends.
• Step 5: Compare the final annual totals side by side, not the monthly direct debit alone.

A monthly direct debit is a budgeting tool, not the price of the energy. It can be adjusted later if your usage changes, so do not choose a tariff just because the monthly figure looks lower. Take ten minutes with your own numbers, read the fine print, and you will switch with confidence rather than hope.