Beyond the monthly payment
How to compare energy tariffs using your own usage
Compare unit rates, standing charges and fees on the same usage, with a worked example that explains why the lowest unit rate can lose.
The useful answer
Compare energy tariffs by applying each offer’s unit rates and standing charges to the same annual usage. Add relevant fees and check eligibility, contract terms and how rates may change. Use the gas and electricity figures separately; a monthly payment quote alone does not establish the lowest cost.
What to know
- Use annual consumption in kWh from your bill or supplier account.
- Compare the same usage, time period, payment method and tax basis.
- A fixed unit rate does not make your total bill fixed if your consumption changes.
Get the right figures before looking at offers.
Your postcode, current tariff and annual consumption help produce a relevant comparison. Keep electricity and gas separate. Record the unit rate in pence per kWh and the standing charge in pence per day for each fuel. Check the VAT basis so both quotes are comparable.
If a bill is estimated or your household has recently changed, make that uncertainty part of the comparison. A new electric vehicle or a different heating routine can make last year’s usage a poor forecast.
Compare the unit rate and standing charge together.
For a simple single-rate tariff over 365 days, the energy component is annual kWh multiplied by the unit rate. Add 365 daily standing charges. Divide pence by 100 to express the total in pounds. Repeat for the other fuel if relevant.
Multi-rate tariffs, time-of-use plans and export arrangements need their own model. Do not compress day and night rates into one headline rate unless the weighting matches your actual use.
Add the costs that the simple sum leaves out.
Check exit fees on the existing tariff, fees on the new offer, any required smart meter and the payment method. Separate a guaranteed discount from a reward that depends on meeting conditions. Compare the full period you expect to keep the tariff.
A fixed tariff keeps the relevant rates stable under its terms; the amount you pay still depends on consumption. A variable offer can change. Look at both the current comparison and the uncertainty you would accept.
Use the comparison to choose the next step.
Keep the quote and its date, record the assumptions, and confirm the terms before accepting. Ofgem’s switching guidance explains the information suppliers need and points to accredited comparison services. Lodo’s bill-saving conversations can help you organise the question around your own circumstances.
After a switch, check the opening account details and the final bill from the previous supplier. Keep your old and new paperwork together so a mismatch is easier to resolve.
Sources & further reading
Examples are illustrative unless stated otherwise.
- Ofgem: understand your electricity and gas bills · Checked 8 September 2026
- Ofgem: switching energy supplier · Checked 8 September 2026
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