Should you switch to a fixed energy tariff?

Britons have felt the impact of rising energy prices in recent years – bills ballooned in 2022 after Russia’s invasion of Ukraine sent the price of energy soaring.

Thankfully, the squeeze is getting wider – in July 2025 the average price of energy for the average family paying for dual-fuel by direct debit fell by 7% under the new Ofgem price cap – although prices remain well above pre-2022 averages.

The average annual energy bill now costs £1,720 for dual-fuel households paying by direct debit on this quarter’s price cap, but prices are expected to rise for the last quarter of 2025.

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Energy consultancy Cornwall Insight, which is well-regarded for its price cap predictions, predicted on 19 August that the price cap will rise by 1% in October until the end of the year.

This will mean that the average annual bill for a household on a dual-fuel tariff, paying by direct debit, will climb by £17 to £1,737.07 for the period of October to December.

Cornwall Insight says energy bills will rise largely because of some changes Ofgem is expected to introduce in this cap period, which includes the expanded Warm Home Discount scheme which offers £150 of energy bill relief to households in receipt of means-tested benefits.

The expansion of the policy does, however, mean that around £15 extra will be added to a typical bill over the course of the year, according to Cornwall’s analysis.

Amid price fluctuations in the market, fixing your energy bill has become more popular.

Around 35% of customers (19 million households) were on a fixed tariff on 1 April 2025 according to Ofgem, up from 28% in January, and just 15% in April 2024 when fewer offers were available.

If you pick a fixed-rate energy tariff, you are locked into paying an agreed rate for a set period of time. This means that if the price cap increases, you will be protected from paying higher rates.

However, the opposite is also true. If the price cap falls, you could be stuck paying more than necessary for your energy.

Considering the volatility of energy bills, should you stay on the price cap or move to a fixed energy tariff? We highlight some of the fixed deals that are currently available.

What is the energy price cap?

The price cap sets the maximum amount that can be charged for standing charges and each unit of energy. It affects customers who are on a standard variable (or default) tariff.

While 19 million households have a fixed energy deal, about 35 million households are sitting on the energy price cap.

The price cap is reviewed on a quarterly basis. The unit rates for the current price cap are shown below.

^{These Ofgem figures are national averages. Your actual unit rates depend on where in the UK you live. You can find out more about prices in your area on the energy regulator's website.}

Based on the above price cap figures, the typical annual bill comes to £1,720 for a dual-fuel household paying by direct debit.

This figure, quoted in pounds, shows what a bill could look like if the cap were to remain at the same level all year.

However, in the real world, the price cap tends to change every three months and so billpayers on a standard variable rate will likely pay more or less than this thanks to price variations over the year.

All billpayers – whether on a fixed or variable tariff – will also see their bill fluctuate based on how much they use.

Does the energy price cap impact fixed-rate tariffs?

Customers who have already locked into a fixed-rate tariff are not impacted by fluctuations in the energy price cap.

However, those who are shopping around for a new fixed tariff will find that prices are influenced by wider trends in the energy market – including how high or low the price cap is at the time.

Where are energy prices heading?

Some organisations try to predict how the price cap will change each quarter.

The July-September price cap kicked in on 1 July, and Ofgem will announce the October-December cap by 27 August 2025.

As mentioned above, Cornwall Insight expects the price cap to rise to £1,737 per year from October – £17 higher than the July price cap of £1,720. This would constitute a 1% hike in energy prices.

This latest prediction, made on 19 August, also represented a significant change from their previous forecast made on 1 July which expected bills to fall by 1%.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said higher bills are not welcome news for consumers, “especially as winter approaches”.

“While the added costs behind this forecasted rise are aimed at supporting those most in need, it does mean typical bills will increase despite relatively lower wholesale costs,” Lowrey said.

“It’s a reminder that the price cap reflects more than just the market price of energy.”

Cornwall Insight is not the only forecaster that expects the price cap to rise in the final quarter of 2025.

On 12 August, EDF energy said, with medium certainty, it anticipates the price cap will rise slightly to £1,740 per year (1.2%) when the new cap is announced.

British Gas also expects bills to rise, saying on 11 August it forecasts average annual bills to rise to £1,760 (2.3%) in the same cap period.

Looking further ahead, there is more division among forecasters over whether prices will rise or fall.

Cornwall Insight says it expects a “small drop in the price cap in January,” but notes that this is subject to geopolitical movement, weather patterns, and individual policies.

British Gas also thinks the price cap will fall modestly in January, going down by £10 to £1,750 per year – the firm says it has “very low” confidence in this prediction, however.

Meanwhile, EDF is less optimistic about falling prices. It expects prices in Q1 2026 will rise modestly by £5 to £1,745 per year, also with “very less” certainty.

Remember, you should take these predictions with a pinch of salt as it is incredibly difficult to accurately predict future prices in a market as volatile as energy.

For more information on whether energy bills will fall, read our 2025 energy price forecast article.

How much does a fixed energy tariff cost?

If you fix your energy, your rates will be locked in for a set period – usually a year. So, regardless of whether the price cap rises or falls, your unit rates and standing charges will remain the same.

This is useful if you value the certainty of knowing exactly what you'll be paying for the year ahead, and could save you money if the price cap increases after you fix your rate.

For example, somebody who fixed their energy bills before the 2022 energy crisis would have been protected from soaring prices until their fixed period ran out, potentially saving hundreds of pounds.

A less extreme example would be if someone fixed their energy bills for a year in July 2024, when the average cost of energy was £1,568 a year. They would have been spared three consecutive increases in the price cap after that point (October, January, April).

Fixing your tariff doesn’t always make sense, though. There is a risk energy prices will fall over the course of your term, leaving you out of pocket.

For example, someone who fixed their energy bills for a year in April 2025 could be stuck paying more now that the July price cap has come into effect, with prices falling by 7%.

That doesn’t necessarily mean it was the wrong decision – a lot will depend on the tariff they locked in and where prices go over the next three quarters (assuming the customer fixed their rate for a year).

How much a fixed energy tariff costs is determined by the level of the price cap when you lock in a deal, as well as the supplier’s predictions of future price movements.

Make sure you shop around to secure the best rate. A number of fixed deals on the market currently beat the July price cap.

Deals that are cheaper than the price cap

• Outfox Energy – Fix'd Dual Aug25 12M v4.0: This 12-month fix comes in 14.6% below the July price cap. It is available to new and existing customers for dual-fuel tariffs only. There is a £75 exit fee per fuel.
• Fuse Energy – August 2025 Fixed (15m) V1: This 15-month fix comes in 12.6% below the July price cap. It is available to new and existing customers for both dual-fuel and electricity-only tariffs. There is a £50 exit fee per fuel.
• Ecotricity – EcoFixed 1 Year Green Tariff July 25 V6: This 12-month fix comes in 10.5% below the July price cap. It is available to new and existing customers for both dual-fuel, electricity-only, and gas-only tariffs. You must have a smart meter and pay by direct debit. There is a £75 exit fee per fuel.
• Octopus Energy – Octopus 12M Fixed August 2025 v1: This 12-month fix comes in 3.4% below the July price cap. It is available to new and existing customers for dual-fuel, electricity-only and gas-only. There are no exit fees.

Source: MoneySavingExpert.com (correct as of 20 August 2025).

While these deals are widely available, there may be loyalty deals that only existing customers can access, which offer superior rates to those listed above. Check with your supplier to see if you can benefit from such a rate.

Bear in mind that some deals come with conditions, such as requiring a smart meter or asking you to sign up for other services.

If you have an electric vehicle, there are specific tariffs available that could be cheaper than the deals mentioned above. We look at the best EV energy tariffs in a separate piece.

Should you fix your energy tariff?

Whether you should fix your energy tariff depends on your attitude to risk and how much you believe energy bills will rise or fall in the next year or so.

Locking into a fixed deal that’s cheaper than the July price cap will mean you pay less than customers on variable tariffs until the end of September, but things could change in October when the new price cap comes into effect.

If prices rise by 1%, as per the latest forecast, then you will continue to save money, but if there is a surprise fall in the energy price cap you may end up paying more than you need. Also beware of exit charges if you need to leave early.

To find the right tariff for you, Alice Haine, personal finance analyst at investment platform Bestinvest, says consumers should “shop around and consider all options including cheaper variable tariffs, a tracker product that changes daily based on wholesale cost, or time-of-use tariffs that can benefit people that want to take advantage of off-peak rates”.

Ofgem energy supplier switching rules change

If you do opt to switch, it’s worth being aware of relatively new rules brought in by the regulator Ofgem. Previously, suppliers had to complete a switch within 15 working days.

As of 1 April 2024, 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 £40.

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