As energy prices remain volatile and far above pre-2022 levels, is now the time to look for a fixed energy tariff? We check out the latest gas and electricity deals
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 the years since, consumers have started to feel some reprieve but average prices remain well above pre-2022 levels.
Energy bills fell by 7% on 1 July under the new Ofgem price cap, bringing the average annual bill to £1,720 for dual-fuel households paying by direct debit. This is £129 lower than the £1,849 price cap that was imposed in ‘Awful April’.
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Consultancy Cornwall Insight thinks bills could fall by a further 1% in October when the next price cap kicks in, however a further escalation in the Middle East could throw this prediction off course if oil prices spike again in a more sustained way.
Amid price fluctuations in the energy market, fixing your energy bill has become more popular. Around 35% of customers (19 million households) are on a fixed tariff according to Ofgem, up from just 15% a year ago 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.
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.
In reality, billpayers on a standard variable rate could find themselves paying more or less than this depending on what happens with the price cap over the coming quarters.
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.
Currently, Cornwall Insight expects the price cap to fall to £1,698 per year from October – £22 lower than the July price cap of £1,720. This would constitute a 1% drop in energy prices.
Cornwall Insight’s latest forecast, published on 1 July, marks an improvement from its previous prediction. Back in May, the consultancy thought the October price cap would rise by 0.4%.
“While any reduction in energy bills is welcome, we must not let small fluctuations in the price cap mask the bigger picture,” said Craig Lowrey, principal consultant at Cornwall Insight.
“Households are still paying far more for their energy than they were before the pandemic, with the current outlook showing little prospect of a meaningful drop over the next few years.”
He added that the UK’s reliance on international energy markets leaves it vulnerable to global events and price shocks. However, the brief spike in oil prices seen in June – a response to the heightened conflict between Israel and Iran – appears to have been short-lived.
“Over the past few weeks, international tensions in the Middle East saw wholesale energy prices rise, with our price cap forecast reaching a peak of £1,777 on 19 June,” Cornwall Insight said.
“As the military tension has eased, the wholesale market has fallen – a fact which, coupled with updates to our forecasts of non-wholesale costs, is reflected in our latest outlook for the cap.”
A separate forecast from EDF Energy puts the October price cap at £1,718, while British Gas is forecasting £1,730. These are regularly updated from week to week. The latest forecasts were published on 1 July and 30 June respectively.
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
E.on Next – Next Fixed 12M V66: This 12-month fix comes in 8.8% below the July price cap. It is available to new and existing customers for both dual-fuel and electricity-only. There is a £50 exit fee per fuel.
Outfox Energy – Fixed Dual Jun25 12M V3.0: This 12-month fix comes in 8.1% below the July price cap. It is available to new and existing customers, and only for dual-fuel. There is a £100 exit fee.
EDF Energy – Simply Fixed Jul26 V13: This 12-month fix comes in 7.2% below the July price cap. It is available to new and existing customers for both dual-fuel and electricity-only. There is a £50 exit fee per fuel.
Octopus Energy – 12M Fixed June 2025 V1: This 12-month fix comes in 3% 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 1 July 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 for the next three months, but things could change in October if the price cap drops by more than you are currently saving. Also beware of exit charges if you need to leave early.
Cornwall Insight currently expects prices to drop in the second half of 2025. After potentially falling by 1% in October, it thinks we could see a further “small fall” in January, before prices rise slightly in April.
None of this is certain. Market volatility, geopolitical risks, and changes to non-wholesale costs could all cause these forecasts to change.
“To find the right tariff for your needs, 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,” said Alice Haine, personal finance analyst at investment platform Bestinvest.
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 £30.
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.
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Daniel is a digital journalist at Moneyweek and enjoys writing about personal finance, economics, and politics. He previously worked at The Economist in their Audience team.
Daniel studied History at Emmanuel College, Cambridge and specialised in the history of political thought. In his free time, he likes reading, listening to music, and cooking overambitious meals.
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