With energy bills rising for the majority of households this autumn, is now the time to opt for a fixed energy tariff?
The Ofgem energy price cap has gone up once again, soaring 10% on Tuesday (1 October). This change will affect homes that are sitting on a standard variable tariff - roughly 27 million households, according to the most recent estimates. It means the average bill will now come in at around £143 a month, £12 more than under the July to September cap. Your actual bill may differ depending on how much energy you use.
In mid-August, research by energy consultancy Cornwall Insight found the average saving from a fixed tariff was just £5 a year. But given the next price cap is expected to keep energy bills at a similar level, this saving may yet increase.
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It comes amid fears that many pensioners could struggle with higher energy costs this winter given the eligibility rules for the Winter Fuel Payment have changed. MoneyWeek has rounded up all the support you can get from your supplier. To ensure you don't get over-charged for your energy, it's worth taking a meter reading on 30 September, or in early October.
So, what fixed energy tariffs are currently available - and should you opt to lock in your energy prices? We've got the latest advice.
How much does a fixed energy tariff cost?
While some five million households have a fixed deal - around one million more compared to the last quarter - some 27 million households are sitting on the energy price cap. Ofgem estimates that if the current level of the cap applied for a 12-month period, it would cost an average household £1,717 a year.
The cap sets the maximum price that can be charged for each unit (kilowatt hour, or kWh) of energy and standing charges on a standard variable - or default - tariff. This limit stays in place for three months. The current price cap unit rates (1 October to 31 December) are:
| Fuel | Price per kilowatt hour (kWh) | Standing charge (per day) |
| Gas | 6.24p | 31.66p |
| Electricity | 24.5p | 60.99p |
Please be aware that these Ofgem figures are national averages, with your actual unit rates depending on where in the UK you live. You can find out more about prices in your area on the energy regulator's website.
If you fix your energy, your unit rates will be locked in for a set period - usually a year. So, even if 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 against future price caps.
Here are the top tariff options that are available direct to all new customers, and how they compare with the October price cap:
Deals that are cheaper than the October price cap
- Outfox the Market Outfox the Price Cap (Oct 24) Fix'd Dual v2.0 - This dual fuel tariff comes in 9% below the current price cap - and even beats the previous cap by 1%. You don't need a smart meter, and you must pay by direct debit. Its exit fee is £50.
- E.ON Next Next Fixed 12m v27 / E.ON Next Gust 12m v12 - These tariffs come in 9% below the October cap and are on a par with July's cap. You will have to have a smart meter fitted. Should you leave early, you can expect a £100 exit fee (dual fuel).
- OVO Energy 1 Year Fixed / 1 Year Fixed Loyalty - Weighing in at the same level as E.ON's deal above, it also comes with a £100 dual fuel exit fee. As well as requiring a smart meter (although you may have wiggle room on this), you'll need to pay via direct debit.
- EDF Energy Essentials 1Yr Oct25v2 - This tariff matches E.ON and OVO on price. You'll need to agree to have a smart meter fitted, and exit fees come in at £50 (dual fuel).
- Octopus Energy Octopus 15M Fixed September 2024 v3 - A 15-month fix, this deal is likely to suit more cautious consumers who value cost certainty. It comes in 7% below the current price cap (2% higher than the July cap). No smart meters are required and there are no exit fees, meaning you can escape the tariff if energy prices fall significantly.
- Sainsbury's Energy Sainsbury's Fix and Reward 12m V25 - This deal is priced at the same level as Octopus's above. You will need to get a smart meter, and exit fees are £100 for a dual fuel household. If you're a newbie, you will also qualify for up to 4,000 Nectar points.
Source: MoneySavingExpert.com (correct as of 30 September)
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 in 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. For example, Ovo Energy offers a fix that comes in below the current cap. But it requires the billpayer to sign up to a boiler cover package for the 12-month term. So, the overall cost of the deal comes in above the price cap (although boiler cover could be handy if your appliance is coming to the end of its operational life).
If you have an EV, there are specific tariffs available that could be cheaper than the deals mentioned above.
Should you fix your energy tariff?
When the energy crisis hit in 2021, energy suppliers all but stopped offering fixed energy tariffs to consumers. But since July 2022, when energy prices started to come down, deals have become more numerous and have become a bit more competitive.
This downwards trajectory peaked in early 2024, when the cheapest fixes came in hundreds of pounds cheaper thanks to falling wholesale prices. By June, you could still save £81 a year on average, according to Cornwall Insight.
Under those conditions, a fixed deal made sense. But with the news that the October cap would soar, good deals rapidly disappeared from the market. Indeed, Cornwall Insight expects we won't see a return to consistent three-figure savings "anytime soon". So, what should you do now?
The question of whether to switch to a fix depends on your attitude to risk, and whether you believe energy bills will go down next year. For the latest price cap predictions, read 'Will energy prices fall in 2024?'.
Ofgem energy supplier switching rules change
If you do opt to switch, it’s worth being aware of new rules brought in by the regulator Ofgem. Previously, suppliers had to complete a switch within 15 working days. Going over this limit would entitle the new customer to compensation.
But, as of 1 April, 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, it’s worth complaining to them directly. Should they fail to pay you the compensation you’re due, you can escalate your complaint to the Energy Ombudsman, which can resolve the dispute.
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