When to move to a fixed energy deal

Most UK households are currently on price-capped variable energy tariffs. But when should you move to a fixed deal?

For almost all households, a variable tariff will currently be cheaper than a fixed deal. However, the next price cap level for variable tariffs is due to come into effect on 1 October 2022, with another following three months later in January 2023. That means your varaible bills will be increasing as the year goes on. 

Whether a fixed deal is right for your circumstances will depend on your budget and how much you value price security. 

If you’re looking for stability ahead of potential future increases, you could consider signing up for a fixed deal if you can find one that has rates (unit rate and standing charge) similar to the variable tariff you are on, as you'd then end up paying less if and when the price cap goes up again. However, there aren't currently any deals that fit this criteria - so it's very unlikely that a deal will be worth it right now. 

Energy suppliers offer some fixed tariffs exclusively to their existing customers. Others are made available for anyone to switch to. They are currently few and far between.

If you do see one advertised, here’s how to understand what a fixed tariff is, and whether it would save you money on your bills in the long run. 

Get the latest cost of living help from Which?

Are you worried about your finances?

Get started

What is a fixed energy tariff?

An energy tariff is a combination of rates for gas and electricity usage per kilowatt/hour, and usually a fixed daily standing charge, that when combined make up the amount you pay your energy provider. The two most common types are fixed-rate and variable tariffs. 

A fixed-rate tariff sets the price you'll pay for your energy for a certain amount of time – typically a year or two. Prices on variable tariffs shift up or down according to what's going on with the energy market, and are affected by the energy price cap.

Fixed deals offer guaranteed standing charges and unit rates, usually until a defined end date. You can end these contracts whenever you wish to, but some have exit fees if you leave before your contract is up. Exit fees could be around £30 per fuel source but we've seen fees that are much higher. You'll have to pay exit fees unless you switch 42-49 days before your contract ends, when they don’t apply. 

Fixed-rate tariffs give the predictability of knowing that you'll be paying the same amount per unit of energy you use, as well as standing charges, for a set period.  

Remember it’s your unit rate that’s fixed rather than your total bill amount. So if you’re on a fixed tariff, you can still decrease how much you spend on your energy payments by reducing how much you use.

• More on this: Understanding your energy bills 

How to work out if a fixed deal is right for you

Ensure you shop around if you’re looking for a fixed deal, rather than necessarily going with what your provider suggests. If your supplier does offer fixed deals to existing customers that aren’t on the open market, they may be worth considering as they are sometimes better than you can find elsewhere. But make sure you compare them with deals on the open market as well.

Comparison sites (including Which? Switch) can only calculate and display one figure for the whole 12 months on your variable tariff, based on what you're paying now. So even if they're showing that to be the cheapest option, you'll need to think about whether that will still be true if and when that tariff goes up.

To work out which option will be best for you, you should find out:

• the rates of your current tariff;
• how much these are forecast to increase by over the next 12 months;
• the rates of the new fixed tariff;
• whether there are exit fees should you cancel the fixed tariff before it's ended.

Consider how the unit rates of the possible fixed tariff compare to those of the variable, bearing in mind the fact that your variable rates are predicted to change at least three times over the same time period. 

Remember that these predictions are not set in stone. With the current volatility in the energy market, the proposed figures could well change many times over the year ahead. 

If you see a tariff available to you with low or no exit fees, this would be really worth your consideration. These give the option to bow out early, should circumstances change in the future.

Compare energy prices available to you

Use Which? To Switch Energy Provider

Compare and switch gas and electricity deals with confidence

Find an energy tariff

Help if you are worried about rising energy costs

This is a difficult time for many households. Insights from our consumer panel in August 2022 showed that six in 10 (59%) people told us they had had to make a financial adjustment such as cutting back on essentials or dipping into savings to cover essential spending in the last month.

If you are worried about not being about not being able to afford higher energy costs, head to our guide to what help is available if you're struggling to pay your energy bills.

A £400 credit on your energy bills will come to all UK households following the government's announcement of its updated cost of living support package.