Fixed vs variable energy tariffs: should you fix under the current price cap?
The price cap is £1,723 a year — but only standard variable tariffs are hit. Here is how to decide whether to lock in a fix now or stay on the cap.
Compare fixed deals
Quick answer: fix or stay variable?
For most households, fixing now is the safer move. The cap has been £1,723/yr since 1 October 2026, and that increase only applies to standard variable (price-capped) tariffs. A fixed deal locks your unit rates and standing charge, so any further rise at the next review on 1 January 2027 cannot touch you. Several fixes are priced below the current cap and some carry no exit fees.
Stay variable only if you expect the cap to fall sharply later in 2026 and want to ride it down. That looks unlikely in the near term: the cap rose to £1,723/yr (updated consumption basis) on 1 October, and the latest supplier forecasts for January–March 2027 average £2,154 (up 25%; British Gas, EDF and E.ON Next, 12–15 October 2026), so the next move is up, not down — which is why the case for fixing is strong right now. Compare both on your actual usage below.
See whether a fix beats the cap on your usage
The price cap limits unit rates on the standard variable tariff — it is not the cheapest deal, and it limits them at a higher level. A fixed tariff priced below the cap can save you money and give you certainty against the next review.
Enter your postcode and we compare the whole market on your real usage, so you see the fixed and variable deals that genuinely beat your current rate.
Tip: take a meter reading on the day the cap changes (next: 1 January 2027) so the old rates cover your usage up to that date.
Fixed vs variable at a glance
Two tariff types, two very different ways your bill behaves when the cap moves.
| Feature | Fixed tariff | Standard variable (price cap) |
|---|---|---|
| How the rate is set | Unit rates & standing charge locked for the term (usually 12–24 months) | Tracks the Ofgem price cap, reset every 3 months |
| When the cap rises | Protected — your rate does not change | Bill rises with it (£1,723 typical since 1 October) |
| At the next review (1 January 2027) | Still protected for the rest of your term | Moves with the cap — Ofgem announces the January–March level on 25 November |
| If the cap falls later | No benefit unless you switch (watch exit fees) | Bill falls automatically at the next reset |
| Certainty over your bill | High — you know your rate for the whole term | Low — changes every quarter |
| Exit fees | Varies — some charge per fuel, several now have none | None — leave any time, 28 days’ notice |
| Best for | Households who want to lock in below the cap and budget with certainty | Those betting the cap will fall and wanting full flexibility |
The case for fixing now vs staying variable
Fix now — lock in below the cap
- The cap is £1,723/yr; a fix locks in a competitive rate below it.
- Several fixed deals are already priced below the current cap.
- Certainty for budgeting — no quarterly surprises through winter.
- You are also protected from any further rise at the next review on 1 January 2027.
- Some fixes have no exit fees, so you keep the option to leave if prices fall.
Stay variable — keep flexibility
- No exit fees and only 28 days’ notice — total freedom to switch.
- If wholesale prices ease, your bill falls automatically at the next cap reset.
- You are never locked above the market if cheaper deals appear.
- Worth considering only if you expect a clear fall — but with the cap having risen to £1,723/yr (updated consumption basis) on 1 October, a near-term drop looks unlikely.
Why gas matters most: the July rise was driven mainly by wholesale gas, with gas unit rates up about 24% versus roughly 5% on electricity. If you heat with gas, the variable bill jump is sharper — which strengthens the case for fixing.
Exit fees: the detail that decides it
Exit fees are what make fixing low-risk. A no-exit-fee fix gives you the upside of a locked rate and the freedom of a variable tariff — if the cap later falls below your fix, you can leave without penalty.
| Scenario | What to look for |
|---|---|
| Fix with no exit fees | Best of both worlds — lock the rate, leave free if a cheaper deal lands |
| Fix with exit fees | Usually charged per fuel; only worth it if the fix is well below the cap and you intend to stay |
| Standard variable | No exit fees, 28 days’ notice — but exposed to the July and October cap moves |
Always compare the fix’s annual cost against the £1,723 cap on your usage, not the typical figure — a high-usage home and a low-usage flat reach very different break-evens.
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Fixed vs variable: your questions answered
For most households, fixing wins. The cap is £1,723/yr and only hits standard variable tariffs. A fixed deal locks your rate, so any further increase at the next review (1 January 2027) cannot affect you. Stay variable only if you genuinely expect prices to fall sharply later in the year.
No. The price cap only limits standard variable (default) tariffs. Around 40% of accounts on fixed deals are unaffected — if you are on a fix, your unit rates and standing charge stay the same until your term ends.
The cap rose to £1,663/yr for a typical dual-fuel home on 1 July 2026 and to £1,723/yr on 1 October, on Ofgem's updated consumption values. Your own increase depends on usage. Unit rates now are roughly 26.32p/kWh + 54.83p/day for electricity and 7.97p/kWh + 29.68p/day for gas.
It can be. Several fixed deals are currently priced below the £1,723 cap, and some carry no exit fees, so you can lock in a lower rate and still leave if a better deal appears. The only way to know your saving is to compare on your actual usage.
The July rise was driven mainly by higher wholesale gas costs. Gas unit rates climbed about 24%, while electricity rose roughly 5%. Gas-heated homes therefore saw the biggest jump on a variable tariff — another reason fixing appeals if you have gas central heating.
There is no guaranteed fall. The cap rose to £1,723/yr on 1 October 2026 (updated consumption basis), and the latest supplier forecasts for January–March 2027 average £2,154 (up 25%; British Gas, EDF and E.ON Next, 12–15 October 2026) — so the short-term direction is up, not down. A no-exit-fee fix lets you lock in now and still switch if a meaningful fall does arrive later.
Choose a fix with no exit fees and there is no penalty for leaving early — you get the locked rate now and the freedom to switch later. Fixes with exit fees (usually charged per fuel) only make sense if the rate is well below the cap and you plan to stay for the term.
Written by: EnergyPlus Editorial Team. Reviewed by the EnergyPlus editorial team. Ofgem confirmed the current cap.
See if fixing beats the current cap
Compare fixed and variable deals on your real usage — the £1,723 cap is in force now, and Cornwall Insight forecasts a further rise in January.
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