Energy & Utilities Fixed vs Variable Energy Tariffs UK — Which Is Best? Should you fix your energy rate or stay on a variable tariff? How to decide based on price cap forecasts, your circumstances, and risk tolerance.
15 August 2025
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4 min read
Choosing between a fixed and variable energy tariff can save (or cost) you hundreds of pounds. Understanding how each works — and what is happening to energy prices — helps you make an informed decision.
Fixed vs Variable: Quick Comparison Feature Fixed Tariff Variable Tariff (SVT) Price per unit Locked for 12–24 months Changes quarterly (with price cap) Certainty High — know your rate Low — changes 4 times/year Exit fees None since 2020 None Best when Prices expected to rise Prices expected to fall Risk May miss out if prices fall Pay more if prices rise
How Each Works Fixed Tariff Aspect Detail What’s fixed Unit rate (p/kWh) and standing charge Duration Typically 12 or 24 months Your bill Still varies with usage, but rate is stable At end of term Moves to SVT (shop around before this) Can you leave early? Yes — no exit fees
Variable Tariff (Standard Variable Tariff / SVT) Aspect Detail Pricing Set by supplier, up to the price cap When it changes Usually quarterly, following Ofgem’s price cap review Protection Cannot exceed price cap Flexibility Can switch to a fixed deal anytime Default What you’re on if you don’t actively choose
When to Fix Scenario Recommendation Fixed rate below current price cap Fix — lock in savings Fixed rate significantly above cap Stay variable Prices expected to rise Fix — protect against increases Prices expected to fall Stay variable — benefit from drops Want budget certainty Fix — easier to plan No exit fees Low risk to fix
Current Market Guidance Market Condition Strategy Fixed deals below price cap Consider fixing — you save now and are protected if cap rises Fixed deals above price cap Stay on SVT unless you strongly believe prices will spike Fixed deals about same as cap Personal preference for certainty vs flexibility High volatility expected Fixing reduces risk
The “No Exit Fee” Advantage Since 2020, you can leave a fixed tariff at any time:
Old Rules Current Rules Exit fees up to £60+ per fuel No domestic exit fees Locked in or pay to leave Switch whenever you want Risk of being stuck on bad deal No risk — just switch if better deal appears
This means:
Fixing is much lower risk than before You can fix to protect against price rises If prices fall significantly, just switch away Best of both worlds (mostly) Comparison Example Assuming price cap of 28p/kWh electricity, 7p/kWh gas:
Tariff Electricity Rate Gas Rate Result SVT at price cap 28p/kWh 7p/kWh Changes each quarter Fixed at 26p/6.5p 26p/kWh 6.5p/kWh Saves ~7% vs cap now Fixed at 30p/7.5p 30p/kWh 7.5p/kWh Costs ~7% more vs cap now
Illustrative figures — actual rates vary.
Predicting Energy Prices Source What It Shows Ofgem price cap announcements Next quarter’s maximum rates Wholesale market forecasts Where energy is trading Expert predictions Cornwall Insight, energy analysts Comparison sites Whether fixed deals are above/below cap
Why Predictions Are Difficult Factor Impact Global gas prices Volatile Geopolitical events Unpredictable Weather Affects supply and demand Renewable output Wind/sun variability Government policy Subsidies, price interventions
Other Tariff Types Tariff Type How It Works Best For Tracker Follows wholesale prices (plus margin) Risk-tolerant customers Time-of-use Different rates at different times Those who can shift usage Agile (Octopus) Half-hourly pricing Very engaged customers EV tariff Cheap overnight charging Electric car owners Green/renewable Renewable energy backing Environmentally focused
How to Decide Quick Decision Guide Question Yes No Are fixed rates below current cap? Consider fixing Stay variable Do you value predictable bills? Fix Variable fine Do you expect prices to rise? Fix Stay variable Do you check energy deals regularly? Either — you’ll switch if needed Fix for peace of mind Are you on a tight budget? Fix — certainty helps budgeting Either
Step-by-Step Decision Step Action 1 Check your current tariff and rate 2 Compare fixed deals on comparison sites 3 Check if fixed is above or below cap 4 Consider price cap forecasts 5 Decide what matters more: certainty or potential savings 6 Switch if a better deal exists
Key Points No exit fees — you can always switch if you find a better dealCompare to the price cap — fixes below cap are good; above cap, think carefullyReview regularly — set a calendar reminder to check every 3–6 monthsEither choice is valid — there’s no “wrong” answer; it’s about your preferencesDon’t stress too much — the price cap protects you on SVTFor more on switching and comparing deals, see our switching energy supplier guide and reduce energy bills guide .