The Tariff Information Label (TIL) explained
All energy suppliers have to publish their tariff information label to enable a standard comparison between electricity and gas offers on the UK market. Want to know what this means and how it works? You'll find all you need to know on this page.
What is a tariff information label?
A tariff information label offers key information about your energy tariff. It was designed by the national energy regulator Ofgem to help customers compare tariffs more easily and allow for increased transparency from energy suppliers.
Where can I find the tariff information label?You should be able to find your tariff information label on your energy bill or annual statment. You can also request it from your supplier, and they are obliged to provide it when informing you of the basic terms of your deal.
What is included on the tariff information label (TIL)?
The tariff information label is a document that lists the following:
- Provider’s name
- Tariff name
- Tariff type: standard variable, fixed, renewable tariffs, etc.
- Payment method: quarterly on receipt of bill, direct debit (monthly/quarterly), etc.
- Unit rate: the cost of a single unit of electricity (kWh)
- Standing charge: price per day that customers pay regardless of consumption
- Tariff end date, if applicable
- Whether or not the price is guaranteed until a given date
- Whether or not the provider charges early exit fees and how much they are
- Whether additional products or services are included in the tariff
This information enables suppliers to estimate average costs based on average UK household energy consumption, i.e., 3,200 kWh for electricity and 13,500 kWh for gas. Suppliers provide:
- Estimated annual cost, including VAT
- Estimated monthly cost, including VAT (annual cost divided by 12)
- Tariff comparison rate, including VAT, in pence per kilowatt hour (kWh)
Ofgem provides a template for tariff information labels. Not all suppliers make this information available, though they are obliged to by industry regulations.
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How to use the tariff information label
The tariff information label allows for a standard comparison of tariffs and tariff types, but there are a few things to keep in mind when looking at it. In this section, we'll clear up a few common pitfalls:
What is the tariff comparison rate (TCR)?
The tariff comparison rate (TCR) allows for standard unit rate comparisons of all energy suppliers and can be adapted to household consumption. For example, if a supplier’s tariff information label gives 15p per kWh as the tariff comparison rate, a household using 2,900 kWh of electricity per year (Ofgem's estimate for a medium-sized household usage for dual-fuel) can work out estimated annual costs for each supplier by multiplying consumption by the TCR:
2,900 kWh x £0.15 = £435 of electricity per year
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Information on potential hidden costs
Suppliers advertise tariff bonuses (e.g., loyalty points and discounts) better than they communicate on costs that are not taken into account into price calculations (e.g., early exit fees). The tariff information label forces energy suppliers to list each component, financial or otherwise, of a given electricity or gas tariff.
Estimated annual costs can be misleading
Estimated annual costs vary from one distribution area to another and when suppliers’ tariff information labels are national, as some are, the tariff comparison rate may not be accurate. More importantly, the estimated annual cost on a tariff information label rests on UK average energy consumption (2,900 kWh a year for electricity and 12,000 kWh for gas), which could be either higher or lower than your consumption. The TIL is therefore purely indicative: do not expect estimated annual costs to be exactly what you'll pay.