Economy 7 and Multi-Rate Tariffs Explained

What Is an Economy 7 Tariff and How Does It Work in the UK?

Economy 7 is a type of electricity tariff that gives you two different rates — a cheaper night rate and a higher day rate.
It was introduced in the 1970s to help households with storage heaters and hot water tanks take advantage of hours of cheaper electricity overnight.

The system works by using a special electricity meter that records usage in two separate sets of numbers — one for the night rate and one for the day rate. These readings help your energy supplier bill you based on when you use power.

In 2025, most Economy 7 users in the UK get their cheaper rate for seven hours between 11 pm and 7 am or midnight and 7 am, depending on your electricity supplier and region.
Some regions in Scotland may see slightly different timings, especially where British Summer Time adjustments apply.

If you use electric storage heaters, a hot water tank, or charge an electric vehicle (EV) overnight, an Economy 7 plan can make a big difference to your electricity bill.

How Many Hours of Cheaper Electricity Do You Get?

The “7” in Economy 7 refers to the seven off-peak hours of cheaper power each night.
Exact times vary depending on:

• Your energy provider and region
• Whether your home observes British Summer Time
• The type of meter installed (some old RTS meters have fixed schedules)

Typical off-peak periods for 2025:

Your electricity usage outside those hours is billed at a higher day rate, so using too much electricity during the daytime can outweigh the savings.

What Is a Multi-Rate or Time-of-Use Meter?

A multi-rate meter (sometimes called a time-of-use meter) records electricity across different rates and time bands — not just two.
This allows suppliers to bill customers based on when they use electricity.

A standard Economy 7 meter has two readings, but multi-rate meters may have three or more readings. Some show a top row and bottom row of numbers on a small digital display, or a set of numbers that can be cycled using a red button.

Older RTS meters are being phased out by Ofgem, so many households are upgrading to smart meters to maintain accurate multi-rate billing.

How Does a Smart Meter Work With Economy 7?

A smart meter automatically records your electricity use in half-hourly intervals, sending readings to your energy supplier securely.
It removes the need for manual meter readings and eliminates errors common with old two-rate meters.

For homes with Economy 7 or multi-rate tariffs, smart meters:

• Accurately record electricity usage during off-peak and peak periods
• Automatically adjust for British Summer Time
• Display day rate and night rate data in real time on the in-home display
• Allow access to dynamic tariffs that vary by the half hour

Modern smart meter energy bill calculators can estimate your yearly cost based on your usage split and your energy tariffs, showing how much cheaper an Economy 7 plan might be.

When Is an Economy 7 Tariff a Good Idea?

Economy 7 is a good idea if you can use at least 40 % of your electricity at night.
That’s the rough break-even point between the lower rate at night and the higher daytime cost.

Households likely to benefit include those with:

• Electric storage heaters or night storage heaters
• A hot water tank that heats overnight
• An EV or electric car charged between midnight and 7 am
• Flexible appliances (washing machine, dishwasher) that can run overnight

If you mostly use energy during the daytime, a single rate tariff or standard energy plan will usually work out cheaper.

Your Next Bill Could Be Lower

Use our calculator to see what you’d save — takes under 6 minutes.

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Example: Annual Costs Using an Economy 7 Calculator

Here’s what 2025 unit rates look like for a typical Economy 7 user, based on Ofgem’s price cap data and MSE averages:

Now let’s see how your usage pattern changes total annual costs (based on 4,000 kWh/year):

(Figures exclude gas and assume typical household usage under the July 2025 energy price cap.)

Check your usage split with the energy bill calculator

How Do Energy Suppliers Decide Economy 7 Hours?

Each energy supplier sets their own off-peak hours, but most follow similar schedules. The difference depends on your meter type, regional MPAN number, and even whether your meter is linked to RTS (Radio Teleswitch) control.

Suppliers in the UK typically divide their time of use like this:

Smart meters make this even more flexible, allowing dynamic pricing linked to grid demand. Some energy companies even reward customers for using appliances like washing machines or EV chargers during surplus renewable periods.

How Does a Multi-Rate Meter Differ From a Single-Rate Tariff?

A single rate tariff (or standard tariff) charges the same unit price all day.
Multi-rate meters support different rates, based on when you use power.

Households without storage heating or electric hot water rarely gain from Economy 7.
Those on standard tariffs may still benefit from switching suppliers to get cheap energy tariffs.

Compare energy prices to find your best energy tariff

What About Electric Cars and EV Tariffs?

Many new electric vehicles are charged at home, often overnight.
If you plug in your EV between midnight and 7 am, you can make full use of your hours of cheaper electricity.
Some energy suppliers offer EV-specific time-of-use tariffs, where electricity may drop below 10 p/kWh during the cheapest hours.

Typical EV charging on a night rate costs around:

Charging during peak hours at 33 p/kWh could more than double these costs.
That’s why EV owners are among the biggest winners under Economy 7 or other multi-rate tariffs.

Can You Switch From Economy 7 to a Standard Tariff?

Yes. If your electricity use is mostly daytime, you can ask your energy provider to switch you back to a single rate tariff.
You may need your meter replaced or reprogrammed — especially if it’s an older RTS meter.

Switching to a flat-rate plan can save money if you can’t shift at least 35–40 % of your usage to night hours.

See your potential savings with the energy bill calculator

How Does Economy 7 Affect Your Heating and Hot Water?

Electric heating systems — especially night storage heaters — are designed to work with Economy 7.
They draw power overnight to store heat, releasing it during the day.
Similarly, hot water tanks can be heated on a separate circuit overnight.

If you rely on these systems, Economy 7 almost always works out cheaper.
If you use panel heaters or daytime electric appliances for heating, your savings will be limited.

What Happens When RTS Meters Are Phased Out?

Older RTS meters (Radio Teleswitch Service) will be discontinued by 2026.
Households still using them will need to upgrade to a smart meter for continued multi-rate billing.

Smart meters automatically handle:

• Correct off-peak hours
• Seasonal time shifts (BST/GMT)
• Half-hourly data for accurate tariffs
• Easier tariff switching between energy companies

Ofgem encourages households to request a smart upgrade early to avoid billing issues when RTS support ends.

How Can You Check Your Meter Readings?

If you have an Economy 7 meter, you’ll see two sets of numbers:

• Top row – shows your day rate usage
• Bottom row – shows your night rate usage

Digital meters may cycle through readings automatically or require pressing a red button.
Always note which reading applies to which period before sending readings to your energy supplier.

Your meter’s MPAN number (found on your bill) identifies the specific tariff structure your home uses.

Comparison: Standard vs Economy 7 vs Smart Tariffs (2025)

Ofgem’s July 2025 energy price cap sets an average electricity bill at around £1,755 per year for a typical dual-fuel household.
Homes with 40–60 % night usage on Economy 7 could pay as little as £1,100–£1,250, depending on location and supplier.

Save More with Dual Fuel Energy Tariffs

Switch both gas and electricity in just 6 minutes and cut your bills.

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How to Switch and Save on Energy Bills

Lowering your energy costs is simple when you follow these quick steps:

Step 1: Use the energy bill calculator by entering your postcode to estimate your typical annual usage and current energy costs.

Step 2: Confirm your current usage, tariff type, and supplier details to ensure the results are accurate for your household.

Step 3: Review your personalised results and compare energy prices to find the cheapest available tariff based on your usage pattern.

Step 4: Choose your preferred deal and switch directly — your new supplier will handle the changeover for you with no interruption to your energy supply.

FAQs About Economy 7 and Multi-Rate Tariffs