What is the difference between a fixed and variable energy tariff?

A fixed tariff locks your unit rates (p/kWh) and standing charge for a set term (e.g., 12–24 months). A variable (standard/default) tariff can change up or down over time, typically when your supplier updates prices or when the Ofgem price cap changes. Fixed = price certainty; variable = flexibility.

Which is cheaper: fixed or variable?

Neither is always cheaper. Fixed deals can protect you from future price rises but may cost more if prices fall. Variable tariffs can drop when the price cap falls but rise when it increases. Choose based on your budget, risk tolerance, and price outlook.

Do fixed and variable tariffs have exit fees?

Fixed tariffs often have exit fees if you leave before the end date. Variable/default tariffs typically have no exit fees. Check your tariff terms for the exact fee (if any).

When should I fix my energy tariff?

Consider fixing if you want bill stability, expect prices to rise, or need certainty for budgeting. A variable tariff may suit you if you want flexibility, expect prices to fall, or prefer to switch anytime without paying an exit fee.

Can I switch before my current deal ends?

Yes. You can switch at any time, but early exit fees may apply on a fixed deal. From up to 49 days before your tariff end date, you can usually switch without paying exit fees.

How does the Ofgem price cap affect variable tariffs?

The price cap limits the maximum average unit rates and standing charges that suppliers can charge on default variable tariffs (by region and payment type). When the cap changes, suppliers typically adjust variable rates. Fixed tariffs are not capped but their rates are locked for the term.

How long do fixed-rate energy tariffs last?

Common fixed terms are 12, 18, or 24 months, though lengths vary by supplier.

Will my direct debit change on a fixed tariff?

Even on a fixed tariff, your supplier may adjust your monthly direct debit periodically to reflect your actual usage or account balance. Your unit rates and standing charge remain fixed for the term.

What happens when my fixed tariff ends?

If you take no action, you’ll usually move onto your supplier’s variable tariff. To avoid potential price changes, review options and switch or choose a new fixed deal before your end date.

Do I need a smart meter to switch tariffs?

No. You can switch without a smart meter, though having one can improve billing accuracy and may unlock certain tariffs.

Fixed vs Variable Energy Tariffs in the UK: Which Should You Choose?

Understanding the difference between fixed and variable domestic energy tariffs can save you hundreds of pounds a year. Use this guide to compare how each tariff type works, what affects your bill, and when it makes sense to switch. Then get a personalised quote and move to a better deal in minutes.

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Last updated: October 2025. Guidance applies to domestic energy customers in England, Scotland and Wales.

Fixed vs Variable at a glance

Feature	Fixed tariff	Variable tariff
Unit price & standing charge	Locked for the term (e.g., 12–24 months)	Can change, often quarterly; may follow wholesale trends
Exit fees	Common (£0–£150 per fuel). Not charged within last 49 days of term	Usually none
Ofgem Energy Price Cap	Does not apply to fixed prices you agree	Applies to most default SVTs; some optional trackers may sit outside
Bill predictability	High price certainty	Prices can go up or down
Best for	Budgeting and protection if prices rise	Flexibility and benefitting if prices fall

How UK energy tariffs work

Your bill is made up of two main parts:

Unit rate (pence per kWh) – what you pay for each unit of electricity or gas you use.
Standing charge (pence per day) – a daily fixed cost to maintain your supply, regardless of usage.

VAT at 5% is added to domestic energy. Your payment method (e.g., Direct Debit), meter type (smart, traditional, prepayment) and region can also affect prices.

What is a fixed tariff?

A fixed energy tariff locks your unit rate and standing charge for a set term (often 12–24 months). Your monthly cost can still vary with usage, but the prices per unit and per day remain the same for the duration of the contract.

Pros of fixed tariffs

Certainty for budgeting and cash flow.
Protection from price rises during your term.
Some deals include perks (e.g., green energy matching, smart meter incentives).

Cons of fixed tariffs

Prices won’t fall if the market drops.
Often include early exit fees if you leave mid-term.
Not covered by the Ofgem price cap (you agree your own fixed rates).

Good for: households that value predictability, or expect prices to rise.

What is a variable tariff?

A variable tariff (including Standard Variable Tariffs, or SVTs) has prices that can move up or down. Most default SVTs are limited by the Ofgem Energy Price Cap, reviewed quarterly. Some optional or specialist variable products (for example, certain wholesale trackers) can sit outside the cap and may change more frequently.

Pros of variable tariffs

Usually no exit fees – switch whenever you like.
Potential to benefit if prices fall.
Simple setup – often the default if you don’t choose a fixed deal.

Cons of variable tariffs

Less predictable bills – prices can rise.
Some specialist variable products can change daily and may exceed the cap if not classed as default tariffs.

Good for: flexibility and taking advantage of falling markets.

How the Ofgem Energy Price Cap affects you

The cap limits unit rates and standing charges on most default SVTs for typical usage. It is not a cap on your total annual bill – your costs depend on how much energy you use.
Reviewed quarterly, the cap reflects changes in wholesale prices and network costs.
Fixed tariffs you actively choose are not covered by the cap.
Prepayment and credit meter customers are covered by cap protections; exact rates differ by region, meter type and payment method.

Common fees and terms

Exit fees: Fixed tariffs may charge per fuel if you leave early. Suppliers must not charge exit fees within the final 49 days of your fixed-term contract.
Payment method: Paying by monthly Direct Debit is often cheaper than pay-on-receipt of bill.
Credit checks: Some suppliers check credit for fixed or special tariffs.
Cooling-off period: You usually have 14 days to cancel a new contract without penalty.
End of fixed term: Suppliers send a reminder around 42–49 days before your deal ends. If you do nothing, you’re typically moved to an SVT.

Should you choose fixed or variable?

Choose a fixed tariff if you:

Want price certainty for 12–24 months.
Expect prices to rise or want to avoid seasonal spikes.
Prefer set-and-forget budgeting.

Choose a variable tariff if you:

Want freedom to switch at any time with no exit fees.
Think prices may fall and want to benefit quickly.
Are happy with some bill variability.

Tip: If you’re on a variable tariff now, compare a few fixed offers. Even a small difference in unit rates can add up over a year.

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Special cases and tariff types

Economy 7 / Economy 10

Time-of-use tariffs with cheaper night rates and higher day rates, best for households that can shift significant electricity use overnight (e.g., storage heaters). Check your day/night split before switching.

Prepayment meters

Pay-as-you-go via key, card or smart prepay. Covered by cap protections, but unit rates and standing charges may differ. Smart prepay can enable easier top-ups and better visibility.

Smart meters

Enable half-hourly readings, accurate billing and access to specialist time-of-use or EV tariffs. Not mandatory, but often unlocks the best variable or dynamic deals.

EV tariffs

Electric vehicle tariffs offer cheaper off-peak charging windows. Works best with a smart meter and scheduled home charging.

Green and renewable tariffs

Suppliers may match your electricity with REGOs or invest in renewable generation. Green tariffs can be fixed or variable; pricing depends on the specific product.

Ways to reduce your bill on any tariff

Use a smart meter for accurate billing and access to time-of-use deals.
Optimise heating controls and insulation to cut kWh usage.
Run high-load appliances off-peak where possible (Economy 7/10 or EV tariffs).
Check eligibility for support such as the Warm Home Discount (criteria set by the UK government each year).
Pay by Direct Debit and choose online billing if it lowers the price.

Compare fixed and variable energy deals today

It takes a few minutes to compare live tariffs for your postcode and meter type. We’ll show you the latest fixed and variable options, estimated annual costs based on your usage, and whether any exit fees apply.

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No hidden fees for comparing.
Switch handled by your new supplier — no engineer visit, no disruption.
14-day cooling-off if you change your mind.

Fixed vs variable tariffs: FAQs

Is a fixed tariff cheaper than a variable tariff?

Not always. A fixed deal can be cheaper if prices rise during your term; a variable deal can be cheaper if prices fall. Compare the unit rates and standing charges against your usage to estimate annual cost.

Can my fixed tariff price increase?

The unit rate and standing charge are locked for the term. Your monthly Direct Debit may be adjusted for usage, but the agreed prices per kWh and per day should not change within the fixed period.

Do variable tariffs always follow the Ofgem price cap?

Most default SVTs are capped. However, some optional variable products (e.g., specialist wholesale trackers) are not default tariffs and may sit outside the cap. Check the supplier’s terms.

Will I be charged an exit fee if I switch?

Variable tariffs usually have no exit fees. Fixed tariffs may charge per fuel if you leave early, except that suppliers must not charge exit fees within the final 49 days of your fixed term.

How long does switching take?

Typically 5 working days once you’ve signed up with the new supplier, plus a 14-day cooling-off period during which you can cancel. There’s no interruption to your energy supply.

What information do I need to compare deals?

Your postcode, meter type (single rate, Economy 7/10, smart or prepay), current supplier and tariff, and your annual kWh usage (from a recent bill). If you don’t know your usage, we can estimate it based on your home size.

Important information

Prices vary by region, meter type and payment method. Quotes are subject to supplier availability and change.
The Ofgem Energy Price Cap applies to most default SVTs and prepayment tariffs but not to fixed tariffs you choose.
Support schemes (e.g., Warm Home Discount) have eligibility criteria and are set by the UK government and suppliers each year.

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Updated on 6 Dec 2025