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.

In another blow for billpayers, the Ofgem energy price cap rose by 2% on 1 October, bringing bills higher until the end of the year.

The average annual energy bill is now £1,755 for dual-fuel households paying by direct debit in the final quarter of the year, £35 more than it was in the previous quarter. It’s worth noting the price cap is a cap on unit prices, not your total bill, so what you pay will depend on how much you use.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Forecasters anticipate a modest fall in the price cap as we start the new year, but overall prices are expected to remain far above pre-2022 levels for the foreseeable future.

Energy consultancy Cornwall Insight said this modest increase in energy bills for Q4 2025 is in part thanks to the expansion of the £150 Warm Home Discount, a government scheme intended for people in receipt of means-tested benefits. Other factors include increased network costs and changes to how the price cap is calculated.

Price fluctuations are rampant in the energy market, with the energy price cap being reviewed every three months. In 2025 alone, the price cap rose by 1.2% in January, increased again by 6% in April, fell by 7% in July, and went up by 2% in October.

Amid this price uncertainty, 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 the latest data from 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.

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 them hundreds of pounds.

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 have been stuck paying more when the July price cap came into effect, as prices fell 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 following 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. As energy prices are set to rise in October, these deals will also likely beat the price cap for the rest of the year.

Deals that are cheaper than the price cap

• Outfox Energy – Outfox the Price Cap - Oct 2025 - 12M v8.0: This 12-month fix comes in 13.6% below the October 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 – September 2025 Fixed (15m) V5: This 15-month fix comes in 12.1% 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.
• Outfox Energy – Fix'd Elec Sep25 12M v5.0: This 12-month fix comes in 14% below the October price cap. It is available only to new and existing customers who just need electricity. You must have a smart meter and pay by direct debit and there is a £75 exit fee.
• Octopus Energy – Octopus 12M Fixed October 2025 v1: This 12-month fix is 6% cheaper than the October price cap and is available to both new and existing customers for dual-fuel, electricity-only, or gas-only tariffs. There is no exit fee.

Source: MoneySavingExpert.com (correct as of 1 October 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 which energy price forecast you believe.

Locking into a fixed deal that’s cheaper than the October price cap will mean you pay less than customers on variable tariffs until at least the end of 2025.

Whether a deal such as this will save you money in the new year is less clear as the price cap for the first quarter of 2026 is yet to be decided.

This being said, predictions by energy consultancy Cornwall Insight, who are well-regarded for the accuracy of their price cap forecasts, believe energy bills will fall by 1.7% to around £1,725 per year in the first quarter of 2026 – £30 less than the current price cap.

Forecasts by British Gas put the Q1 2026 price cap at £1,750, and others by EDF put it at £1,747.

The announcement for the January 2026 price cap is still some time off, being scheduled to be released by 25 November. This means it is very difficult to accurately predict where energy bills will go.

EDF and British Gas also say their predictions have a low level of certainty, so it is best to take these with a pinch of salt.

Tom Lyon, Energy Expert at Compare the Market, said:“If you’re weighing up a new tariff, it’s a good idea to look closely at the unit rate and standing charge, as these may vary significantly between suppliers.”

“Fixed deals may offer peace of mind by locking in pricing for a period of time, but it’s worth comparing them against the current price cap to see if they could save you money.

“And watch out for exit fees, some tariffs may charge you if you switch again before the end of the deal. Taking a little time now to review what’s available could help you avoid unwelcome surprises down the line.”

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 around 20 million households have a fixed energy deal, about 34 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 (October to December) 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 is £1,755 from October to December 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 pay more than this if they use more energy.

Does the 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.

Ofgem energy supplier switching rules

If you opt to change providers, 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.