A fixed price energy tariff locks the price you pay per unit of gas and electricity, plus your daily standing charge, for an agreed term, usually 12 or 24 months. It does not fix your total bill: use more energy, and you still pay more, because the rate is fixed, not the amount. However, government tax or levy changes may still affect the final rate you pay.
The judgement in one sentence: whether fixing is worth it comes down to how the fixed rates on offer today compare with where the price cap is heading over the length of the deal.
This guide explains how fixed tariffs work, what they cost you in flexibility, and how to make that judgement for yourself.
A fixed price tariff locks the supplier’s unit rate and daily standing charge for a set period. However, government tax or levy changes may still affect the final rate you pay.
Your bill can still go up or down. If you use more energy in a cold January than in a mild May, you pay more in January. What is fixed is the price of each unit, not the total.
The alternative is a standard variable tariff, where your rates move with Ofgem’s price cap, which is reviewed every three months. If you have never switched, or you have let a previous fix lapse, this is almost certainly what you are on.
| Supplier & Tariff | Estimated Annual Bill |
|---|
NOTE: The prices above are based on an average UK energy consumption of 2,500 kWh electricity and 9,500 kWh gas per year. In the industry these are referred to as Typical Domestic Consumption Values (TDCVs), and they were updated by Ofgem on 1 July 2026.
Enter your postcode to see the fixed tariffs available at your address, with the unit rate, standing charge and exit fee for each.
Fixed deals vary by region and by supplier, and the cheapest tariff nationally is often not available where you live. The only figures that mean anything are the ones for your own postcode.
Any fixed deal is worth judging against the rate you would otherwise pay. These are the capped rates for a standard variable tariff paid by Direct Debit:
| Unit rate | Standing charge | |
|---|---|---|
| Electricity | 26.11p per kWh | 57.19p per day |
| Gas | 7.33p per kWh | 29.04p per day |
Ofgem price cap, 1 July to 30 September 2026, GB average, including VAT at 5%. A medium-usage household on these rates pays around £1,664 a year. VAT on domestic electricity falls to 0% from 1 October 2026.
Neither is better in the abstract. They are different trades.
| Fixed tariff | Standard variable tariff | |
|---|---|---|
| Price certainty | Rates locked for the full term | Rates change every three months with the cap |
| If prices rise | You are protected | Your rates rise |
| If prices fall | You do not benefit | Your rates fall |
| Exit fees | Usually apply, typically £25–£75 per fuel | None |
| Rate vs the cap | Often slightly above, sometimes below | Set at the cap |
| Best for | Budgeting certainty, expecting rises | Flexibility, expecting falls |
Fixed rates usually sit a little above the current cap, because the supplier is taking on the risk of wholesale prices rising and pricing that risk in. You are effectively paying a small insurance premium for a predictable bill.
That premium is not always there. When wholesale markets expect prices to fall, fixed deals can undercut the cap outright. When markets expect rises, as they do at the time of writing, fixed rates tend to sit above it.
Fix if you need to budget with certainty, you would struggle to absorb an unexpected rise, or you think rates are heading up over the term of the deal.
Stay variable if you expect rates to fall, you want the freedom to move at any time without penalty, or you are likely to move house or change circumstances soon.
For a deeper look at the timing question, see our article on whether you should fix your energy prices.
There is no universal answer, but there is a method. Work through these three steps.
Ignore the headline annual estimate. Compare the fixed tariff’s unit rate and standing charge directly against the capped rates above, for both fuels. Annual estimates are built on assumed usage that may look nothing like yours.
The cap is reviewed quarterly. If forecasts point upward across the term of the fix, a rate slightly above today’s cap can still work out cheaper overall. If forecasts point down, the same rate is a bad deal.
A fix priced within a few per cent of the current cap is generally reasonable value if you want certainty. A fix more than about 10% above the cap needs a strong expectation of rising prices to justify it.
Forecasts currently point upward into the winter.
| Electricity | Gas | Typical annual bill | |
|---|---|---|---|
| Current cap Jul–Sep 2026 |
26.11p per kWh | 7.33p per kWh | £1,664 |
| October forecast Oct–Dec 2026 |
26.27p per kWh | 7.70p per kWh | £1,700 |
October figures are Cornwall Insight’s forecast as at 22 July 2026, not confirmed rates. Ofgem is expected to announce the October cap in late August 2026.
Three things follow from this.
Gas is doing the work. The forecast gas unit rate rises around 5%, while electricity barely moves. Gas-heavy homes — most homes with a gas boiler, feel this more than the headline suggests, and they feel it just as the heating season starts.
The electricity figure is flattered by a tax change. VAT on domestic electricity drops from 5% to 0% on 1 October 2026. That forecast of 26.27p already has the VAT removed. Strip the tax change out and the underlying electricity cost is rising more than the number implies.
The VAT cut is temporary. The VAT cut has been announced as a temporary measure from 1 October 2026. Unless it is extended or made permanent, the tax element would eventually return, something to bear in mind when considering a longer fixed term.
1 October 2026 to 31 March 2027: VAT on domestic electricity falls from 5% to 0%, worth roughly £45 a year on a typical bill. Electricity only — gas stays at 5%.
It is not a reason to delay fixing. The government has said it expects suppliers to pass the saving on to all customers, including those already on fixed tariffs. Suppliers have priced the change in already, and it is reflected in the October forecast above. Waiting until October to fix does not capture a saving you would otherwise miss.
It does change how you should think about term length. The cut runs to 31 March 2027 as announced. A 12-month fix taken now sits mostly inside that window. A 24-month fix runs well past it, and would have to absorb the tax coming back unless the cut is extended or made permanent. If you are weighing 12 against 24 months, that is a point in favour of the shorter term.
Take a medium-usage household, 2,500 kWh of electricity and 9,500 kWh of gas a year, weighing up a 12-month fix.
| Option | Cost over 12 months | Difference |
|---|---|---|
| Stay variable | £1,694 | Baseline |
| Fix at £1,720 | £1,720 | +£26 - a defensible trade |
| Fix at £1,850 | £1,850 | +£156 - hard to justify |
The variable figure assumes two months at the current cap, then ten months at roughly the October forecast, with the cap then holding broadly flat. It will not hold perfectly flat, but it is a reasonable working assumption.
Paying £26 more to know the number in advance is a defensible trade. Paying £156 is a lot for certainty unless you have a specific reason to expect a sharp rise. The arithmetic is simple; what makes it useful is doing it with the actual rates you have been offered rather than a headline figure.
One caution: forecasts are not facts. Cornwall Insight’s October figure has moved repeatedly this year as the Middle East conflict has affected wholesale gas. Treat any forecast as a direction of travel, not a promise.
Most fixed tariffs charge a fee if you leave before the end of the term. This is the trade-off for the locked rate.
Typical amounts are £25 to £75 per fuel, so a dual fuel customer leaving early might pay £50 to £150 in total. Some tariffs have no exit fee at all, and these are worth seeking out if there is any chance you will move house or want to switch again.
The single most useful thing to know about fixed tariffs: Ofgem rules mean you cannot be charged an exit fee in the final 49 days of a fixed term.
It means you can start comparing and switch away up to seven weeks before your deal ends, at no cost, and move straight onto a new tariff rather than being rolled onto the standard variable rate. Switches typically complete within five working days, so 49 days is ample.
Your exit fee and end date will be on:
If you cannot find them, your supplier must tell you on request. Ask for the exit fee per fuel and the exact end date, and diarise it.
More on switching windows in our guide to switching without penalty.
You are moved onto your supplier’s standard variable tariff automatically. You do not have to agree to it, and it happens whether or not you noticed the deal ending.
This is often a price rise, particularly if your previous fix was below the current cap. The standard variable tariff is usually priced at the cap, which is the maximum a supplier is permitted to charge, it is the default, not a deal.
Your supplier must write to you between 42 and 49 days before the end of your fix to tell you it is ending and what happens next. That letter is easy to miss among everything else a supplier sends.
Doing nothing can be expensive, particularly where a cheaper replacement tariff is available.
Five things to check before committing.
Compare unit rate and standing charge together. A tariff with a low unit rate and a high standing charge can be worse for a low-usage household and better for a heavy one. Both numbers matter, and the balance between them matters more the further your usage sits from average.
Do not rely on the headline annual estimate. Those figures assume typical usage. If you use significantly more or less than average, the ranking of deals can change completely once you put your own numbers in.
Check the exit fee before you commit, not after. A slightly more expensive tariff with no exit fee can be the better choice if your circumstances might change.
Think about term length honestly. A 24-month fix is a longer bet on the direction of prices. It is the right call if you value certainty highly and expect rises; it is an expensive mistake if rates fall sharply in year two. If you are unsure, 12 months limits the downside.
Remember that the cheapest advertised deal may not be available to you. Fixed tariffs are priced by region, and some are restricted to existing customers, specific payment methods or particular meter types. The only list that matters is the one for your postcode.
It depends on the rate you are offered. Forecasts as at August 2026 point to the cap rising around 2% in October, driven mainly by gas. On that basis, a fix priced within a few per cent of the current cap is reasonable value for the certainty; one well above it is harder to justify.
You keep paying your fixed rate. That is the trade, you gave up the upside of falls in exchange for protection against rises. You can leave early and take the cheaper rate, but you will usually pay an exit fee of £25 to £75 per fuel, which may cancel out the saving.
Yes. You can switch at any time, but you will normally pay an exit fee unless you are within the final 49 days of the term, when Ofgem rules prohibit exit charges. Check the fee per fuel first, if the saving from switching exceeds it, leaving early can still be worthwhile.
Yes, and they are fixed for the term along with the unit rate. The standing charge is a daily fee you pay regardless of how much energy you use. It varies between fixed tariffs, so compare it alongside the unit rate rather than looking at the unit rate alone.
You are moved onto your supplier’s standard variable tariff automatically, which is priced at the Ofgem cap and usually costs more. Your supplier must notify you 42 to 49 days beforehand. Compare deals during that window, when no exit fee can be charged.
A 24-month fix gives longer certainty but is a bigger bet on prices rising, and usually costs more per unit because the supplier is pricing more risk. A 12-month fix limits your exposure if rates fall. If you have no strong view on where prices are heading, 12 months is the safer default.
A fixed tariff protects you from rate rises. It does not protect you from using more energy; it does not let you benefit if rates fall, and it usually costs something to leave early.
There is no universally right answer, only a judgement about how much certainty is worth to you. Three questions settle it for most people:
Once you have answered those, the only thing left is to see what is actually available at your address.
Last updated: 3 August 2026. Capped rates reflect the Ofgem price cap for 1 July to 30 September 2026. Forecast figures are Cornwall Insight’s Default Tariff Cap prediction as at 22 July 2026 and are not confirmed rates. Next review due at the October 2026 price cap announcement, expected late August 2026.
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