What is a fixed energy tariff?

A fixed energy tariff locks your gas and electricity rates for a specified period, typically 12 or 24 months. This means your price per unit of energy won't change throughout the contract duration, providing certainty over your monthly bills.

Should I choose the energy price cap or a fixed tariff?

Choosing between the energy price cap and a fixed tariff depends on your preferences for price stability and potential savings. A fixed tariff protects you from future price increases, while the cap moves with the market, so you may benefit if prices fall. Compare the latest deals and consider your household's energy needs before deciding.

What are the benefits of a fixed tariff contract?

A fixed tariff offers price stability and peace of mind, so you know what you’ll pay for each unit of energy regardless of market changes. It's ideal for budgeting and can protect you from unexpected price hikes.

Are there drawbacks to choosing a fixed energy tariff?

The main drawback is that if energy prices drop, you could end up paying more than those on a variable tariff. There may also be early exit fees if you switch suppliers before your contract ends.

How can I switch to a better energy deal?

Switching energy deals is easy with Energy Plus. Compare the latest energy tariffs online at https://www.energyplus.co.uk/ and see how much you could save. Simply enter your postcode to get personalised quotes and take advantage of the best deals.

UK Energy Price Cap vs Fixed Tariff: Pros & Cons for Your Home

Q: What is the UK energy price cap?

The UK energy price cap is a government limit on the maximum amount energy suppliers can charge per unit of gas and electricity. It's designed to protect consumers from excessive rates and applies to most customers on default or standard variable tariffs.

Choosing the right home energy tariff can help you manage your household bills and protect your budget. But should you stick with the standard variable tariff (covered by the UK energy price cap), or switch to a fixed tariff? EnergyPlus breaks down the pros and cons, so you can make the best choice for your household.

What is the UK Energy Price Cap?

The energy price cap is a limit, set by Ofgem (the energy regulator), on the maximum amount suppliers can charge per unit of gas and electricity for customers on standard variable tariffs (SVTs). It aims to protect households from excessive costs, but the cap is reviewed regularly and changes in line with the wholesale market.

Key Points:

Applies automatically to most default/standard variable domestic tariffs
Does not set a cap on your total bill—only on unit rates and standing charges
Changes every three months (January, April, July, October)
Aims to protect households from extreme price spikes

What is a Fixed Tariff?

A fixed energy tariff locks in the price you pay per unit of energy for a set period (usually 12, 18, or 24 months). While your monthly bill will still vary depending on how much energy you use, your unit rate and standing charge won't change during the fixed term—even if the energy price cap (and market prices) go up.

Comparing the Pros and Cons

Price Cap Tariffs: Pros

Automatic protection – No action needed; applies to most standard variable tariffs
No exit fees – Switch or leave at any time without penalty
Potential short-term savings – Beneficial if wholesale prices fall between cap reviews
Flexibility – Not tied to long-term contracts

Price Cap Tariffs: Cons

Lack of bill certainty – Rates can change every three months
No guarantee of lowest price – Better fixed deals may be available
Vulnerable to market trends – If cap rises, your bills go up

Fixed Tariffs: Pros

Price security – Unit rates stay the same for the whole term
Budget certainty – Easier to plan for your energy spend
Protection from rising costs – If the cap increases, you pay the same fixed rate
Potential savings – Lock in a deal when prices are low

Fixed Tariffs: Cons

Early exit fees – Leaving early can incur charges (check terms)
Higher initial rates – Fixed tariffs are sometimes above the cap at sign-up
No benefit from price drops – You're locked in if the cap falls

Price Cap vs Fixed Tariff: Which Should You Choose?

Your decision depends on your household’s circumstances and preferences:

If you value flexibility and the freedom to switch at any time, the price cap (SVT) may suit you.
If you want peace of mind and predictability for budgeting, a fixed tariff could be best.
If you believe prices will rise in the next year or two, fixing now may protect you from higher rates.
If prices look likely to fall, sticking with the price cap could see you benefit from future reductions.

How to Compare Energy Tariffs and Switch

Comparing energy tariffs is easier than ever. Here’s a step-by-step:

Check your current tariff – Is it variable (price cap) or fixed?
Note your usage – You’ll get better quotes with accurate annual usage (kWh for gas and electricity).
Use an EnergyPlus comparison tool or trusted price comparison site.
Review exit fees and contract lengths before you commit.
If you decide to switch, your new supplier will manage the transfer – usually in under 3 weeks, with no disruption.

Compare Home Energy Tariffs Now

Frequently Asked Questions: UK Energy Price Cap vs Fixed Tariff

Yes, if you are on a standard variable tariff, your unit rate and standing charge will adjust up or down in line with the price cap set by Ofgem during the next review.

No – you can leave or switch from a price-capped variable tariff at any time without penalty.

Yes – use our comparison tool to find fixed tariffs available for your postcode and usage. Just check your current deal for exit fees before switching.

When a fixed tariff ends, you’re usually moved onto your supplier’s standard variable tariff (which is price-capped). It’s a good time to compare and switch for better rates.

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Content last updated: June 2024. EnergyPlus is committed to helping UK homeowners and renters save money on their energy bills and stay informed about the latest price cap changes and fixed tariff options.

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Updated on 16 Dec 2025