Is a tracker tariff usually cheaper than the Ofgem price cap?

It can be, but it depends on wholesale market prices and the tariff’s formula. Tracker tariffs typically follow a daily or monthly wholesale index, so when wholesale prices are low they may undercut price-cap level unit rates. When wholesale prices rise, a tracker can be similar to—or higher than—price-cap rates. Always compare the unit rate (p/kWh), standing charge (p/day), any caps/limits on the tracker, and your expected usage before switching.

What’s the difference between a tracker tariff and the Ofgem price cap?

The Ofgem price cap is a limit on what suppliers can charge for typical default tariffs (set as a maximum unit rate and standing charge, updated periodically). A tracker tariff is a type of variable tariff where your rates move in line with a published market index (often wholesale electricity/gas prices) plus a supplier margin. Trackers can change more frequently (sometimes daily), meaning bills can move up or down faster than under the price cap.

Are tracker tariffs risky?

Tracker tariffs can be higher risk than fixed or standard variable tariffs because rates may rise quickly during market volatility. To manage risk, check whether the tracker has a maximum daily/unit cap, understand how often prices change, and confirm you can switch away without high exit fees. Keeping a buffer in your budget helps if rates spike.

How do I know if a tracker tariff will save me money?

Compare your current unit rates and standing charges with the tracker’s recent average rates and worst-case rates (if a cap applies). Use your annual consumption from a recent bill (kWh for electricity and gas) to estimate annual cost under each option. If you have a smart meter, you can also look at your seasonal usage patterns—trackers may be most attractive when wholesale prices are expected to stay low.

Can tracker prices go above the price cap?

Yes. The Ofgem price cap applies to certain default tariffs, not to all tracker products. If wholesale prices rise sharply, a tracker tariff’s unit rates can exceed price-cap levels unless the tracker includes its own cap or limit. Always read the tariff’s pricing method and any maximum rate rules before switching.

When is a tracker tariff a good idea?

A tracker tariff may suit you if you can tolerate price changes, want to benefit when wholesale prices fall, and can switch quickly if rates become uncompetitive. It can also be a good fit if you actively monitor costs and prefer transparent, index-linked pricing rather than longer fixed deals.

Can I switch away from a tracker tariff easily?

Usually, yes—many variable and tracker tariffs have no exit fees, but this varies by supplier and product. Before you switch, check the contract terms for exit fees, notice periods, and how quickly the new tariff starts. If you want help choosing an option, you can compare tariffs on Energy Plus: https://www.energyplus.co.uk/

Is a tracker tariff cheaper than the Price Cap in the UK?

Q: Do I need a smart meter for a tracker tariff?

Not always, but many tracker tariffs work best with a smart meter because readings can be submitted automatically and bills are more accurate. Some suppliers may require a smart meter for certain tracker products. If you don’t have one, check eligibility and how meter readings must be provided.

Tracker tariffs can be cheaper than the Ofgem Price Cap, but the cost moves with the market. Compare whole-of-market UK home energy deals with EnergyPlus and see whether a tracker, fix or variable tariff could cut your bills.

Whole-of-market comparison for UK homes (electricity, gas or dual fuel)
See tracker vs fixed vs standard variable options side-by-side
Switching support with no jargon and clear next steps

Compare tracker & Price Cap deals How tracker tariffs work

Figures on this page are for guidance only. Your unit rates and standing charges depend on region, meter type and payment method. Always check tariff terms before switching.

So, is a tracker tariff cheaper than the Price Cap?

It can be. A tracker tariff usually follows a published wholesale or market index (often with a supplier margin). If markets fall, your unit rates may drop and you could pay less than a typical Standard Variable Tariff (SVT) that’s limited by the Ofgem Price Cap. If markets rise, your costs can rise too — sometimes quickly.

Important: The Price Cap is not a “maximum bill”. It caps unit rates and standing charges for SVTs and default tariffs, not what you pay overall. Your bill still depends on usage, meter type and region.

When a tracker is more likely to be cheaper

Wholesale prices are stable or falling (common after a period of high volatility).
The tariff has a sensible cap (maximum unit rate) or strong consumer protections.
You can tolerate month-to-month changes and prefer flexibility over certainty.
You’re coming off a high fixed deal and don’t want to lock in again.

Compare home energy tariffs

Fill in your details to see tracker, fixed and variable options available in your area.

Tip: Have your latest bill handy. If you know your annual kWh usage for gas and electricity, you’ll get the most accurate comparison.

Already know what you want? Jump to how tracker tariffs work, or see checks to estimate savings safely.

Tracker tariff vs Price Cap: benefits and risks

If you’re deciding whether a tracker tariff is cheaper than the UK Price Cap, the right question is often: “Is the potential saving worth the extra uncertainty?” Here’s what to weigh up.

Potentially lower rates

Trackers can undercut SVTs when markets fall, sometimes delivering savings versus Price Cap levels — especially if the supplier margin is small.

More responsive pricing

The Price Cap updates periodically, while trackers may move daily/weekly/monthly. That can be an advantage when wholesale prices drop quickly.

Flexibility

Many trackers have low or no exit fees, making it easier to switch if a better fixed tariff appears.

Budgeting is harder

Your unit rate can rise, which can be stressful if your budget is tight or your usage is high (e.g. electric heating, large households).

Not all trackers are equal

Some trackers include higher standing charges, wider margins, or less favourable index formulas. Always check the tariff details.

Rate caps & safeguards vary

Some trackers have a maximum unit rate; others don’t. That difference can materially change risk in volatile markets.

Practical rule of thumb: If you need predictable payments, a competitive fixed tariff may suit you better. If you can cope with movement and want flexibility, a tracker could be a good fit — especially if you’re ready to switch again if rates rise.

How tracker energy tariffs work in the UK

A tracker tariff typically sets your unit rate based on a reference market price (an “index”), then adds (or includes) a supplier margin and other costs. The unit rate is then updated on a defined schedule.

An index is chosen (e.g. a wholesale market indicator, sometimes linked to day-ahead prices).
The supplier sets the formula (index ± margin) and the frequency of updates (daily/weekly/monthly).
Standing charges still apply and can differ from Price Cap SVT levels.
Your bill changes with usage and with the tracker’s rate movements.
You can usually switch again (check exit fees and any minimum term).

Key terms to check before you switch

What exactly is tracked?

Look for a clear statement of the index and the calculation method. If it isn’t easy to understand, treat that as a risk.

How often do rates update?

Daily trackers can move quickly; monthly trackers tend to be smoother. Faster updates can mean faster savings — or faster increases.

Is there a maximum unit rate (cap)?

Some trackers set a ceiling price. This can protect you during spikes, but read the cap level carefully.

Standing charge and exit fees

A tracker can look cheap on unit rates but be less competitive once standing charges are included. Exit fees affect how easy it is to leave.

EnergyPlus tip: Compare tariffs using your expected annual usage (kWh) where possible, not just unit rates. That’s the most reliable way to see whether a tracker is cheaper than the Price Cap for your home.

What is the Ofgem Price Cap (and what it isn’t)?

The Ofgem energy Price Cap limits the maximum unit rates and standing charges suppliers can charge customers on default tariffs (usually Standard Variable Tariffs) in Great Britain. It is designed to protect consumers who haven’t actively chosen a tariff.

What it does

Caps unit rates (p/kWh) and standing charges (p/day) on SVTs and default tariffs.
Varies by region, meter type and payment method.
Changes periodically based on costs (including wholesale energy costs).

What it doesn’t do

It doesn’t cap your total bill — higher usage still means higher cost.
It doesn’t mean every tariff must be below it (fixed deals can differ).
It doesn’t guarantee the cheapest option for your home.

Because the Price Cap applies to SVTs/default tariffs, a tracker tariff can sit below Price Cap levels at times — but it can also move above them depending on market conditions and the tariff’s structure.

How to check if a tracker tariff will be cheaper for your home

To compare a tracker tariff with the Price Cap fairly, you need to consider unit rates, standing charges, and your usage. The checklist below helps you estimate cost and avoid common comparison mistakes.

What to compare	Why it matters	What to look for
Electricity unit rate (p/kWh)	The biggest driver of cost for most homes.	Tracker’s current rate, how it’s updated, and any cap on increases.
Gas unit rate (p/kWh)	Crucial if you have gas central heating.	Same as above — plus any minimum term.
Standing charges (p/day)	High standing charges can erode savings.	Compare electricity and gas standing charges separately.
How you pay	Direct Debit vs other methods can affect pricing.	Ensure you compare tariffs on the same payment method.
Exit fees & contract terms	A cheap tracker isn’t flexible if it’s expensive to leave.	Low/no exit fees if you want the option to fix later.

A simple way to sanity-check costs

1) Estimate your annual usage

Use your bill to find annual kWh for electricity and gas. If you don’t have it, a comparison using postcode and household details can still give a strong estimate.

2) Compare total annual cost, not headlines

Calculate: (unit rate × kWh) + (standing charge × 365). Then compare tracker vs SVT/Price Cap vs fixed.

Want the quick answer for your area? Use the form above or scroll back to compare and we’ll show the best available options based on your postcode.

Common mistakes when comparing tracker tariffs to the Price Cap

Comparing the wrong tariff type

The Price Cap applies to SVTs/default tariffs, not fixed deals. Make sure you’re comparing tracker vs SVT (and also check competitive fixed options).

Ignoring standing charges

A tracker with a low unit rate can still cost more overall if the standing charge is higher, particularly for low-usage households.

Assuming today’s rate is permanent

Tracker prices change. If you’re right on budget, consider whether you’d cope with a spike and how quickly you could switch away.

Good to know: Your region (distribution network area) affects both the Price Cap rates and the tariffs available. That’s why postcode-based comparison is essential for accurate results.

FAQs: tracker tariffs and the UK Price Cap

Are tracker tariffs covered by the Price Cap?

Usually no. The Ofgem Price Cap generally applies to SVTs and default tariffs. A tracker is typically a separate product with its own pricing mechanism.

Can a tracker tariff go above the Price Cap?

Yes, it can. Some trackers may include a cap on their own rates, but that’s different from the Ofgem Price Cap. Always check whether a tariff includes an upper limit and what it is.

Is a tracker better than a fixed tariff?

It depends on your risk tolerance and market conditions. Fixed tariffs give certainty (helpful for budgeting). Trackers offer flexibility and may be cheaper when markets fall, but they can rise unexpectedly.

Do I need a smart meter for a tracker tariff?

Not always. Some trackers and smart tariffs may require a smart meter, but many standard tariffs (including some trackers) are available without one. Availability varies by supplier and meter type.

What if I’m on prepayment?

Tariff availability can be more limited on prepayment meters, and rates differ. Use a postcode-based comparison to see what’s available for your meter type and payment method.

How quickly can I switch if a tracker rises?

Switching times can vary. Check for exit fees and any minimum term, and consider how comfortable you are with short-term fluctuations while a switch completes.

If you’re unsure, compare all options — tracker, fixed and SVT — and choose based on your budget needs. Get your results here.

Why UK homeowners use EnergyPlus

When you’re weighing up whether a tracker tariff is cheaper than the Price Cap, you need a comparison that reflects real-world costs — including regional standing charges and the latest products available.

Whole-of-market approach

We compare a broad range of UK home energy tariffs, so you can see tracker, fixed and variable options in one place.

Clear, practical guidance

We explain what matters: unit rates, standing charges, caps, exit fees and how pricing updates — without the fluff.

Switching support

If you choose to switch, we’ll help you understand the next steps and what to expect during the process.

What customers tell us

“The comparison was straightforward and helped me understand the difference between tracker and fixed rates. I could see the standing charges clearly.”

UK homeowner, dual fuel switch

“I wasn’t sure if a tracker would beat the Price Cap in my area. The postcode comparison made it clear which option was best for my usage.”

UK homeowner, electricity customer

Trust signals: We focus on transparent comparisons for UK domestic energy customers. Results depend on eligibility, meter type and availability in your postcode.

Ready to see if a tracker beats the Price Cap for your postcode?

Compare whole-of-market home energy tariffs with EnergyPlus. We’ll show tracker, fixed and variable options available for your household so you can choose with confidence.

Postcode-based rates (region-specific standing charges included)
Clear view of exit fees, terms and pricing updates
Help switching if you decide to move supplier

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Updated on 9 Jan 2026