Energy tariffs explained
Fixed vs Variable Energy Tariffs in the UK
Choose the right electricity and gas plan for your home or business. Learn the difference between fixed and variable tariffs, how the Ofgem price cap affects bills, when exit fees apply, and what to consider before you switch. Ready to compare? Get a fast, personalised quote today.
Fixed vs Variable: Quick comparison
Here’s how the two main tariff types differ in Great Britain (England, Scotland and Wales). Northern Ireland has a separate energy market.
| Feature | Fixed tariff | Variable tariff |
|---|---|---|
| Unit rate (p/kWh) & standing charge | Locked in for the term | Can go up or down |
| Price changes during contract | No (unless VAT/taxes change) | Yes, usually in line with market and Ofgem price cap for default tariffs |
| Contract length | Typically 12–24 months | Open-ended (no end date) |
| Exit fees | May apply if you leave early | Usually none |
| Budget certainty | High | Lower |
| Flexibility | Lower | High |
| Best for | Households that want predictability | Those who value flexibility or expect prices to fall |
What is a fixed energy tariff?
A fixed tariff locks your unit rate (pence per kWh) and standing charge (daily fee) for a set period, usually 12–24 months. Your monthly bill will still vary with how much energy you use, but your rates won’t change during the term unless government taxes or levies change.
Benefits of fixed tariffs
- Price certainty for easier budgeting
- Protection from market spikes during your term
- Often competitive rates if fixed at the right time
Things to consider
- Early exit fees may apply if you leave before the end date
- If wholesale prices fall, a fixed rate may end up higher than a later variable rate
- You’ll normally be notified 42–49 days before your fix ends so you can switch with no exit fee
What is a variable energy tariff?
A variable tariff has no end date and rates can move up or down. Many customers are on a supplier’s standard variable tariff (SVT) by default. Changes typically reflect wholesale costs and, for default tariffs, the Ofgem price cap which is reviewed periodically.
Benefits of variable tariffs
- High flexibility – switch or leave at any time (usually no exit fees)
- Can benefit if prices fall
- No need to track an end date
Things to consider
- Rates can increase, so bills may be less predictable
- Default tariffs are generally subject to the Ofgem price cap limits; non-default variable products may differ
- Supplier pricing decisions and market conditions can change with little notice
About the Ofgem price cap: In Great Britain, the cap sets a limit on the maximum unit rate and standing charge a supplier can charge customers on default tariffs. It does not cap your total bill; your usage still determines what you pay. Ofgem typically reviews the cap quarterly.
Which tariff is right for me?
Everyone’s needs are different. Consider your budget, how long you’ll stay at your address, and your appetite for price risk.
Choose a fixed tariff if you:
- Prefer predictable rates for 12–24 months
- Want protection from potential price rises
- Don’t plan to move soon
Choose a variable tariff if you:
- Value flexibility with no end date
- Want to switch quickly if prices fall
- May move home within the next year
Unsure what suits you? Our team can help you weigh up the options based on your usage and goals.
How our tariffs work
- Clear pricing: We provide your unit rates, standing charges and estimated annual costs up-front.
- Payment options: Monthly Direct Debit is common; other payment methods may be available.
- Smart meters: We support smart meters for accurate, automatic readings where available.
- Online account: Manage your tariff, submit readings and track usage in one place.
Quote availability and eligibility criteria apply. Tariff terms and conditions will be presented before you switch.
How switching works
- Get a quote: Tell us about your home, meter type and estimated usage. We’ll show available tariffs.
- Choose your plan: Review rates, terms and any exit fees. Select fixed or variable.
- Cooling-off period: You usually have 14 days to change your mind.
- Go live: There’s no engineer visit in most cases and no interruption to supply. We’ll coordinate with your old supplier, and you’ll receive a final bill from them.
Moving home? You can take your tariff with you in many cases or choose a new one for your new address. Tell us your move date in advance.
Fees and charges to know
- Standing charge: A daily fixed amount to cover network and other costs, charged regardless of usage.
- Unit rate: What you pay per kWh of electricity and gas used.
- Exit fees: May apply on fixed tariffs if you leave early. We’ll always show these clearly before you switch.
- VAT: Domestic energy is typically charged at 5% VAT in Great Britain (subject to government changes).
We’ll provide a personalised estimate based on your stated usage. Actual bills will vary with your consumption.
Understanding your energy bill
Your bill is largely determined by:
- How much energy you use (kWh)
- Your tariff’s unit rates and standing charges
- Billing period length and meter type (single vs multi-rate such as Economy 7/Time-of-Use)
Submitting regular meter readings or using a smart meter helps ensure accurate, not estimated, bills.
Business energy tariffs
Businesses can choose fixed or variable energy deals too. Business contracts often run 12–36 months and may have different terms from domestic tariffs. If you operate a microbusiness or SME, speak to us for tailored options.
Support and protections
- Ofgem regulation: The energy market in Great Britain is regulated by Ofgem. Default tariff prices are limited by the price cap.
- Priority Services: Eligible customers can join a Priority Services Register for free additional support.
- Warm Home Discount: If you qualify under the scheme rules, you may receive a one-off rebate on your electricity bill each year. Eligibility and availability are set by government and participating suppliers.
Fixed vs Variable Tariffs: FAQs
What’s the main difference between fixed and variable tariffs?
A fixed tariff locks your unit rate and standing charge for a set term, providing price certainty. A variable tariff can change, usually in response to market conditions and the Ofgem price cap for default tariffs.
Are variable tariffs always cheaper than fixed?
Not necessarily. Variable rates can be cheaper when prices fall and more expensive when they rise. Fixed deals can offer good value and certainty if secured at the right time.
Do fixed tariffs have exit fees?
Many fixed tariffs include an early termination fee if you leave before the end date. We show any exit fees clearly before you sign up. Within the switching cooling-off period, you can usually cancel without charges.
How does the Ofgem price cap affect my bill?
The price cap limits the maximum unit rate and standing charge that suppliers can charge customers on default variable tariffs. It doesn’t cap your total bill, which depends on your usage. The cap level is reviewed periodically by Ofgem.
Do I need a smart meter to switch tariffs?
No, but smart meters help ensure accurate billing and unlock certain time-of-use tariffs. Availability depends on your location and meter compatibility.
Can I switch if I’m on a prepayment meter?
Yes, switching is usually possible for prepayment customers. Options can vary by meter type and any existing debt. We’ll guide you through the available tariffs.
What happens when my fixed tariff ends?
We’ll contact you before your tariff ends. You can select a new fixed deal, move to a variable tariff, or switch to another supplier. There’s usually no exit fee in the final 49 days of a fixed term.
Will my supply be interrupted if I switch?
No. Energy flows through the same pipes and wires, regardless of supplier. Switching is administrative and your supply continues as normal.
Ready to compare tariffs?
Answer a few quick questions and see your personalised rates. It only takes a couple of minutes.
Information on this page applies to the gas and electricity markets in Great Britain (England, Scotland and Wales) and is provided for general guidance. Product availability, eligibility, rates and terms are subject to change. We will present full tariff details and terms before you sign up.