Should you switch to a fixed energy tariff?

Energy prices have become less volatile in recent years following a turbulent 2022 and 2023.

The wholesale cost of gas shot up following Russia’s invasion of Ukraine in early 2022, after global prices had already started rising as countries emerged from the coronavirus pandemic.

The Ofgem energy price cap surged from £1,216 per year in the winter of 2021/2022 to £1,877 by the summer of 2022.

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Had it not been for the Energy Price Guarantee, brought in by then prime minister Liz Truss, the price cap could have reached northwards of £4,000 in 2023.

The price cap has steadied since then, and will rise by just 0.2% on 1 January. The average household on a dual-fuel tariff paying by direct debit will see their yearly bill rise by £3, from £1,755 to £1,758, for the quarter.

However, some people prefer more security, and a fixed tariff can offer just that.

Roughly 21 million households are currently on a fixed tariff, according to Ofgem, up from 19 million on 1 April.

But how exactly do they work, and are they a better option than the price cap in the current climate?

How much does a fixed energy tariff cost?

A fixed energy tariff locks in your rate for a fixed period, usually a year, meaning you’re shielded from any changes in the wholesale cost of energy.

A fixed energy tariff doesn’t fix what you pay, just the rate you are charged per unit of gas and electricity. So, like with the price cap, the more you use, the more you’ll have to pay.

Timed right, fixed deals can potentially save you hundreds of pounds a year compared to someone on the price cap, if wholesale costs shoot up.

But, conversely, there is the risk energy prices will fall over the term of your fixed tariff, meaning you pay more than someone on the price cap.

In any case, you’ll want to make sure you shop around for the best rate. You can do this through price comparison sites like MoneySuperMarket, Go.Compare and MoneySavingExpert.com. A number of fixed deals currently on the market are up to 15% cheaper than the current price cap.

Deals that are cheaper than the price cap

• Fuse Energy: December 2025 Fixed (12m) V3, 12 month fix. 15.2% less than the current price cap, open to new and existing customers, but comes with a £50 early exit fee per fuel.
• Outfox Energy: Merry Fix-Mas 2025 12M v2.0, 12 month fix. 13.4% less than the current price cap, open to new and existing customers, but comes with a £75 early exit fee per fuel.
• Ecotricity: EcoFixed – 1 Year Oct 25 v1, 12 month fix. 13% less than the current price cap, open to new and existing customers, but you must pay by direct debit and the deal includes a £75 early exit fee per fuel.
• So Energy: So Kielder One Year – Green, 12 month fix. 12.9% less than the current price cap, open to new and existing customers but comes with £75 per fuel early exit fees.

Source: MoneySavingExpert.com (correct as of 18 December 2025).

Bear in mind, while these deals are widely available, there may be loyalty deals which are exclusive to existing customers. These can offer superior rates to those listed above. Check with your supplier to see if you can sign up for one of these tariffs.

Always read the fine print of any fixed tariff as well – some require you to have a smart meter, pay by a certain method or require you to sign up for other services to unlock the deal.

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?

Ultimately, whether a fixed tariff is for you is down to your appetite for risk.

Fixing offers you the certainty of knowing what you’ll pay per unit of gas and electricity rather than depending on the price cap which is subject to change.

Cornwall Insight is a well-regarded consultancy and research firm that regularly makes predictions on what the price cap will be in the future.

Its latest forecast, from 26 November, suggests the April price cap will fall from £1,758 to £1,675 in April 2026. Ofgem will announce the price for April on 25 February.

What will happen to energy prices beyond this is harder to predict, however if you sign up for a fixed tariff now well under the current price cap, you could potentially make some savings over the long term.

Nathan Blackler, expert at Go.Compare Energy, said: “Fixed tariffs offer protection against energy market volatility and give peace of mind, especially for households with tight budgets or those who prefer financial stability.

“However, it’s not a one-size-fits-all solution. Fixed deals often come with higher exit fees, meaning that if you want to end your contract early you’ll have to pay a fee.

“Some fixed tariffs may also have higher rates than standard variable tariffs, particularly if energy prices fall during your contract, so you could end up paying more than those on a variable plan.”

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 (also known as default) tariff.

While around 21 million households are on 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.

The unit rates for the price cap from January 2026 to March 2026 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, the price cap changes 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.

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.

Bear in mind, if you’re on a fixed tariff and switch providers, you may incur an early exit fee if you’re moving before the end of the deal term.