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 will rise by 2% for the period between 1 October and 31 December.

The average annual energy bill will rise by £35 from £1,720 to £1,755 for dual-fuel households paying by direct debit in the final quarter of the year, and prices are expected to remain above pre-2022 levels for the foreseeable future.

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

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, as well as 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 will now rise by 2% in September.

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 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 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 next 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 v1.0: This 12-month fix comes in 14.9% 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) V2: This 15-month fix comes in 12.7% 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.
• E.on Next – Next Fixed 12m v78 – This 12-month fix is 9.5% cheaper than the July price cap and is available to both new and existing customers for dual-fuel and electricity-only tariffs. There is a £50 per fuel exit fee.

Source: MoneySavingExpert.com (correct as of 27 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 which energy price forecast you believe.

Locking into a fixed deal that’s cheaper than the July price cap will mean you pay less than customers on variable tariffs until at least the end of 2025 as the October price cap is 2% higher than July’s.

Whether a deal such as this will save you money beyond 31 December 2025 is less clear as the price cap for that quarter is yet to be decided.

Predictions by Cornwall Insight, Cornwall Insight, EDF, and British Gas all point towards a lower price cap in the first quarter of 2026. The firms expect prices to go down by 2.4%, 0.5%, and 3.4%, respectively.

However, the announcement for the January 2026 price cap is still many months away, meaning 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.

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”.

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 (July to September) are shown below.

Ofgem has now confirmed that these figures will increase by 2% from October to the end of the year.

The unit rates for the October to December 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 is £1,720 until October for a dual-fuel household paying by direct debit. This will rise to £1,755 from October to the end of the year.

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.