Should you switch to a fixed energy tariff?

Fixed energy tariffs have not been competitive for two years. But with the Ofgem energy price cap set to rise this autumn, is now the time to switch?

A fixed energy tariff symbolised by money appearing in front of an electricity pylon
Is a fixed energy tariff the right option? We've explained what you need to consider
(Image credit: Getty Images)

For more than two years, competitive fixed energy tariffs have been a rarity.

When the energy crisis hit, energy suppliers all but stopped offering them to consumers. It's left most households sitting on standard variable tariffs, the rates of which are governed by the Ofgem energy price cap

The 28 million or so homes on this type of energy product received some good news on 24 May when the energy regulator announced its cap was going to plummet 7% from July. The news followed a 12% fall in the cap in April.

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However, there are concerns about whether we could see a surge in energy costs this winter. Trusted forecaster Cornwall Insight has said it expects to see prices rise 12% from October.

So, is it worth switching to a fixed deal - and what options are out there? Here's what you need to know.

How much does a fixed energy tariff cost?

Deals that are less than the energy price cap

The energy price cap fell 12.3% on 1 April and will tumble again from 1 July. The regulator's limit governs how much you pay per unit (kilowatt hour, or kWh) and for daily standing charges. So, your final bill will depend on your usage.

The cap also varies depending on the size of your home, how many people you live with and what part of the UK you live in (price cap rates are set differently in each region).

However, if you're not on a standard variable tariff (SVT) - the type of energy deal you fall onto when your fix expires - the price cap will not apply to you. So, for example, if you've fixed your energy deal the amount you pay will not change. Ofgem estimates around four million homes are on a fixed deal.

Here are top the tariff options on the market today, according to comparison website Uswitch, and how they compare with the upcoming July price cap (£1,568 a year):

Swipe to scroll horizontally
Top tariffs open to new customers
SupplierAverage annual billExit fees?% above/below next price cap
Ecotricity£1,540£75 per fuel-2%
Octopus Energy£1,579None+1%
Ovo£1,612£75 per fuel+3%
British Gas£1,635£50 per fuel+4%
E.ON Next£1,640£50 per fuel+5%

Correct as of 23 May 2024

There are other fixes that may come in below the price cap rate. However, they usually come with conditions. For example, you may have to be an existing customer or sign up to an add-on from your supplier, such as a boiler cover package.

Other forms of energy product may also be cheaper than the fixes listed above. For example, if you have an EV, there are specific tariffs available that could save you money.

Should you fix your energy tariff?

Until fairly recently, there has been little incentive to switch to a fixed-rate deal. Few suppliers have been able to match the energy price cap. However, with news that energy prices could rise again, experts say the situation has changed. 

Will Owen, Uswitch's energy expert, said: "Storm clouds are on the horizon with the cap predicted to rise again in October. This would mean higher rates over the winter, when we use the most energy for heating our homes.

“If you’d prefer to avoid the uncertainty of rising costs in winter, now is a good time to think about taking a fixed energy deal, which would let you lock in rates while prices are cheaper. Fixed energy tariffs are the cheapest they’ve been since summer 2021 and there are some great value deals currently worth considering.”

Owen was echoed by director of personal finance at AJ Bell, Laura Suter. She said: "The return of a bit more normalcy to the energy markets means we’re also now out of the long period where it wasn’t worth fixing your energy deal.

"That means it’s worth weighing up what your energy provider is offering you and working out whether it might be cheaper than staying on the energy price cap. It’s not a simple answer though, and you’ll need to do some digging on what the price cap is likely to do over the next year and how much discount your energy provider is offering to work out if you’re getting a good deal."

Suter added that she feels "switching apathy" could mean it’s "unlikely" that there will be a flurry of switching. She said: "It's much harder to work out if you’re getting a good deal on your energy. The legacy of regulator-controlled pricing in the energy market during the past few years is likely to be even less switching from consumers, who have gotten so used to sitting on a price cap tariff.”

For the latest predictions, read will energy prices fall in 2024?

Ofgem energy supplier switching rules change

If you do opt to switch, it’s worth being aware of new rules brought in by the regulator Ofgem. Previously, suppliers had to complete a switch within 15 working days. Going over this limit would entitle the new customer to compensation.

But, as of 1 April, suppliers have to complete customer switches within five working days (six if you enter into a contract after 5pm). Failure to do so will mean they have to pay affected customers compensation of £30.

If the supplier you’re moving to fails to switch you across in time, it’s worth complaining to them directly. Should they fail to pay you the compensation you’re due, you can escalate your complaint to the Energy Ombudsman, which can resolve the dispute.

Henry Sandercock
Staff Writer

Henry Sandercock has spent more than eight years as a journalist covering a wide variety of beats. Having studied for an MA in journalism at the University of Kent, he started his career in the garden of England as a reporter for local TV channel KMTV. 

Henry then worked at the BBC for three years as a radio producer - mostly on BBC Radio 2 with Jeremy Vine, but also on major BBC Radio 4 programmes like The World at One, PM and Broadcasting House. Switching to print media, he covered fresh foods for respected magazine The Grocer for two years. 

After moving to NationalWorld.com - a national news site run by the publisher of The Scotsman and Yorkshire Post - Henry began reporting on the cost of living crisis, becoming the title’s money editor in early 2023. He covered everything from the energy crisis to scams, and inflation. You will now find him writing for MoneyWeek. Away from work, Henry lives in Edinburgh with his partner and their whippet Whisper.

With contributions from