It sounds simple — but understanding this distinction properly can save you hundreds of pounds per year. Many households remain on a standard variable tariff (SVT) without realising it. Others actively switch to fixed energy deals to secure lower rates. The key is understanding how each works from first principles before deciding which is right for your home. In this comprehensive guide, we'll explain: what an energy tariff actually is, what defines a standard variable tariff, what counts as an energy deal, how pricing structures differ, which option typically costs more, and when switching makes financial sense. Our goal at Utility King is simple: give you the clarity to compare energy tariffs intelligently and avoid overpaying.
First Principles: What Is an Energy Tariff?
An energy tariff is the pricing agreement between you and your energy supplier. It determines how much you pay for gas and electricity. Every tariff includes two core components:
The price you pay per kilowatt-hour (kWh) of energy used.
A fixed daily cost that covers infrastructure, network maintenance, and metering services.
Once you understand this formula, the difference between energy deals and standard variable tariffs becomes clearer.
What Is a Standard Variable Tariff (SVT)?
Standard Variable Tariff
A standard variable tariff is the default energy plan offered by suppliers. You are typically placed on an SVT if:
- You have never switched suppliers
- Your fixed energy contract has ended
- You did not actively choose a new tariff
The key word is "variable." The supplier can adjust the unit rate and standing charge — usually in line with wholesale energy market movements or regulatory caps. SVTs offer flexibility, but not price certainty.
Energy Deals
The term energy deals usually refers to fixed-term energy tariffs designed to offer competitive pricing. These tariffs:
Energy deals are typically marketed as: fixed-rate energy tariffs, dual fuel deals, online-only energy plans, or limited-time switching offers. When customers search to compare energy deals, they are usually looking for lower rates than the standard variable tariff.
The Core Difference: Stability vs Flexibility
At its core, the difference between energy deals and standard variable tariffs comes down to: price stability vs contract flexibility.
Standard Variable Tariff
- Flexible
- No long-term commitment
- Rates can rise
- Often more expensive over time
Fixed Energy Deal
- Locked-in pricing
- Predictable monthly bills
- May include exit penalties
- Often cheaper than SVT
The trade-off is clear: flexibility versus cost control.
Why Are SVTs Often More Expensive?
Standard variable tariffs are usually priced higher because:
Many households unknowingly remain on SVTs after their fixed tariff ends — leading to higher annual energy costs. At Utility King, we frequently find customers paying significantly more simply because they have not reviewed their tariff.
When Is Each Option Better?
📅 SVT may be suitable if:
- • You plan to move house soon
- • You are waiting for better fixed deals
- • Market rates are falling
- • You want no exit fees
SVTs offer maximum flexibility. However, they rarely offer the lowest long-term cost.
🔒 Fixed Deal may be better if:
- • You want predictable budgeting
- • You are on a fixed income
- • You prefer protection from price increases
- • Wholesale markets are volatile
Locking in a competitive fixed energy tariff can protect against future rate rises.
The Financial Impact: Why Comparison Matters
Consider this simplified scenario:
Household A stays on a standard variable tariff.
Household B switches to a competitive fixed energy deal.
If the fixed deal offers even a slightly lower unit rate and standing charge, the annual difference can be substantial — especially for high-usage households.
Energy price comparison should always focus on:
Not all energy deals are automatically cheaper. Not all SVTs are automatically expensive. The difference lies in the numbers.
Is Switching from an SVT Safe?
Yes. Switching energy suppliers or moving from an SVT to a fixed deal:
- Does not interrupt your supply
- Does not require engineering work
- Is regulated and protected
- Includes a cooling-off period
Your gas and electricity continue flowing through the same national grid. The risk is not physical disruption — it is remaining on an uncompetitive tariff without reviewing alternatives.
Utility King's Perspective
At Utility King, we believe every household should understand which tariff they are on. The biggest mistake we see is passive renewal. Energy markets reward active consumers. Suppliers rarely reward loyalty automatically.
If you are on a standard variable tariff, the question is not whether it is safe — it is whether it is financially efficient. Comparing energy deals regularly is one of the simplest ways to control household costs. The right choice depends on your risk tolerance, your financial stability, your energy usage, and current market conditions.
Informed switching is not risky. Uninformed staying often is.
Frequently Asked Questions
A standard variable tariff (SVT) is a flexible energy plan with no fixed end date where rates can change.
Often yes, particularly fixed-rate energy deals — but this depends on market conditions.
Yes. SVTs usually have no exit fees.
Many do. Always check contract terms before switching.
Fixing energy prices offers stability and protection from increases, which can be beneficial during volatile markets.
Most customers move onto an SVT automatically when their fixed contract ends.
At least once per year or when your fixed contract expires.
Unsure which tariff you're on?
Let Utility King help you review your plan and compare options — ensure you're not overpaying.