What’s in this guide?
The tariff comparison rate or TCR was a tool that was introduced by Ofgem in 2010 to help customers compare gas and electricity plans.
In 2017, Ofgem announced that it no longer expected suppliers and energy comparison sites to provide consumers with a tariff comparison rate.
This guide will explain everything you need to know about the TCR as well as why Ofgem made that decision.
What is a TCR?
Have you ever thought that energy plans are elaborate?
Ofgem thought the same, which is why in 2010 they decided to propose a new type of rate that would allow consumers to compare electricity and gas plans against each other easily.
You could compare the use of the TCR to APR% in loans and credit cards.
A tariff comparison rate is a number that takes into account all of your costs like discounts and rates.
You can then take that number and quickly compare it against another plan, however, it only really works if you are in an average medium use household.
This is because it uses the typical average use household’s consumption to come up with the final TCR number.
For electricity, this is 3,100kWh and 12,000kWh of gas.
How would I work out a TCR?
- Use the Ofgem average consumption numbers
- Add an annual standing charge
- Take away discounts
- Add VAT
- Then, divide this digit by 3,100 for electricity or 12,500 for gas
Was the TCR the best way to compare energy suppliers?
While the tariff comparison rate would have given you a reasonable idea of which tariff plans would have been good for you and your family, there are better ways of comparing.
The cheapest and most effective way of comparing tariffs and suppliers is to use a comparison tool as you can see at the top of the page.
Because it takes into consideration your specific details such as your location, your monthly spend, when you would like your tariff to start and more.
This means it is likely to be far more accurate than using an estimation based on a household that may not match your circumstances.
Why did Ofgem remove the TCR?
Citing an ‘evolving market’, Ofgem decided that the tariff comparison rate isn’t beneficial for helping customers to compare energy suppliers for one very important reason.
It doesn’t take anything else into account.
Many different factors go into why you may want to switch to a different supplier; perhaps it’s that your new supplier offers better customer service? Or a wider range of services that better match your needs?
With this in mind, most energy companies have removed the TCR from their energy plans, so don’t be surprised if you can’t find any.
Important Questions to Keep in Mind When Switching
- Is the tariff cost-effective?
- Does the supplier have excellent customer service?
- Do they offer any extra services I might need?
- Can I get a smart meter?
- Will switching be painless?
- Will I have stability with the new supplier?
Is switching complicated?
Years ago, switching energy supplier might have been a painful process.
However, thanks to government efforts and regulations, you are now protected as a customer from this stress so your new supplier will take care of everything related to your switch.
How long does it take to switch?
Firstly, you will have a two-week cooling-off period, where your energy supplier won’t do anything.
After that, however, it can take around a month and a half to complete the switching process.
Your new energy supplier should keep you updated on your switch, typically by post or email.
Aren’t all energy suppliers the same?
Many energy suppliers are similar in aspects as they receive their energy from the same place.
However, it’s not all about the price of the energy.
Customer service is more important than the price of the tariffs to some customers, which they say they are happy to pay a bit more for.
Can my tariff come with me when I move?
Some suppliers will allow you to take your cheap tariff with you when you move, but you need to get in contact with your supplier first and check.
You should also check the rates in your new area (with a postcode if you have it) as energy has different costs in different locations.
Once I switch, will my supplier tell me if prices rise?
Your energy supplier has to warn you about any price rises with a minimum of 30 days notice.
Are you ready to compare, but you aren’t sure where to start?