One of the most confusing parts of switching energy suppliers is knowing how your current tariff compares, with the other alternatives available.
The numbers can seem overwhelming, and for the layman, the comparison between energy usage and tariff costs is simply not possible without a comparison website to assist them.
Consequently, most comparison sites use a tariff comparison rate to give an accurate and meaningful idea of how much you can save overall.
A Tariff Comparison Rate (TCR) is a tool you can use to simply and accurately compare different energy suppliers, and therefore choose a supplier that meets all your needs, whilst offering the best value for money.
It was introduced by Ofgem as a way of making it possible for all energy users to easily compare their deals.
When you look for a new deal because you are planning on switching, you will notice that your quotes will often include the TCR figure.
This is calculated by taking the following factors into account: average usage, your location, the length of the deal you are looking at, any exit fees and the tariff rates on offer.
The figure quoted will offer a guideline, but can be used to make comparisons between different suppliers.
The TCR always uses the average energy use for the UK (a household that uses 3,100 kWhs of electricity and 12,500 kWhs of gas per year, fact fans), and is based on the typical home and family.
If yours is not typical, you may find the figure to be less accurate than you want.
But in terms of offering a great way to compare different suppliers, it’s an extremely handy tool.
You want to choose a comparison website that incorporates the TCR.
That way, you know that they’re using the standard approach recommended by Ofgem, and are therefore giving you the best, and most accurate information.
It does not tell you how much you will pay for your energy costs, but rather how what you will pay with one supplier compares to that of another supplier.
This can be valuable information when you are choosing the cheapest energy supplier when switching.
If you are planning on switching energy suppliers, keep the TCR in mind, and look for it when comparing different suppliers.
Your comparison site will probably do this for you – but understanding what all these numbers mean will allow you to be better informed, and, therefore, able to make informed and considered choices.
