A fixed energy tariff is an energy tariff where the agreed unit rates and standing charges are usually fixed for a set period, such as 12 months.
The word “fixed” can be misleading. It usually means the rates are fixed, not the total amount you pay. If your household uses more gas or electricity, your bill can still increase.
How a fixed energy tariff works
On a fixed energy tariff, the supplier agrees the unit rate and standing charge for the contract term. Your usage is still measured in kWh.
energy bill = kWh used × fixed unit rate
+ daily standing charge × days
+ VAT and any account adjustments
This means a fixed tariff can help with price certainty, but it cannot stop the bill changing if usage changes, meter readings are corrected or your account balance changes.
A fixed tariff is not a fixed total bill
A common mistake is assuming a fixed tariff means the same total payment forever. In reality, most fixed tariffs fix the price per unit and daily charge.
| What may be fixed | What can still change |
|---|---|
| Electricity unit rate | How many kWh of electricity you use. |
| Gas unit rate | How many kWh of gas you use. |
| Daily standing charges | Your account balance, meter readings and Direct Debit review. |
Exit fees and the 49-day rule
Some fixed tariffs include exit fees if you leave early. Citizens Advice says if you have 49 days or less left on a fixed tariff, you can switch for free. If you have 50 days or more left, you might have to pay an exit fee.
Ofgem also says you may have to pay an exit fee if you switch tariffs or suppliers before your fixed rate tariff ends. Always check your tariff terms before switching.
net saving from switching = expected tariff saving - exit fees
Fixed tariffs and the energy price cap
The energy price cap applies to default tariffs, including standard variable tariffs. It does not automatically cap every fixed tariff because fixed deals have their own agreed rates.
A fixed tariff can be cheaper or more expensive than the capped default tariff. The only reliable way to compare is to use your annual kWh usage, the quoted fixed rates, the default tariff rates and any exit fees.
Fixed tariff vs standard variable tariff
A standard variable tariff can go up or down, often when the price cap changes. A fixed tariff gives rate certainty for a contract term.
| Feature | Fixed energy tariff | Standard variable tariff |
|---|---|---|
| Rate certainty | Agreed rates usually stay fixed for the term. | Rates can change. |
| Price-cap link | Not automatically capped in the same way. | Default tariff rates are protected by the cap. |
| Switching | May include exit fees. | Usually more flexible. |
| Main risk | You may miss out if variable rates fall. | Your rates can rise when the cap rises. |
When a fixed energy tariff may be useful
A fixed tariff may be useful when you value certainty, the quoted rates are competitive, and you are comfortable with the contract length and exit fees.
- You want protection from future rate increases during the fixed term.
- You prefer clearer rate certainty for budgeting.
- The fixed annual cost is lower than the comparable variable tariff.
- You do not expect to move or switch again soon.
- Exit fees are low enough that the deal still makes sense.
When a fixed tariff may be risky
A fixed tariff can be less attractive if prices fall, your exit fee is high, or the quote is based on unrealistic usage.
- Variable rates might fall during the fixed period.
- You may move home or switch supplier before the tariff ends.
- The tariff has high exit fees.
- The standing charge is high even if the unit rate looks good.
- The quoted Direct Debit hides the true annual cost.
Fixed tariff vs fixed Direct Debit
A fixed energy tariff is about rates. A Direct Debit is about payment. You can have a fixed monthly Direct Debit on a fixed tariff, but the supplier may still review the payment if your usage or account balance changes.
Compare the annual cost of the tariff, not just the monthly payment shown in a quote.
What to check before choosing a fixed tariff
Before you fix, compare the full annual cost and the terms.
- Electricity unit rate and standing charge.
- Gas unit rate and standing charge.
- Contract length.
- Exit fees per fuel.
- Whether prices are actually fixed for the whole term.
- Whether the quote uses your real annual usage.
- What happens when the fixed term ends.
Compare the annual cost
Use your own usage and quoted tariff rates before deciding whether fixing is worth it.
FAQs
What is a fixed energy tariff?
A fixed energy tariff is a deal where agreed unit rates and standing charges are usually fixed for a set period.
Does a fixed tariff fix my total bill?
No. It usually fixes the rates, not the total bill. Your bill still depends on how much energy you use.
Can I leave a fixed tariff early?
Yes, but you may have to pay an exit fee unless you are close enough to the end of the contract.
Is a fixed tariff always cheaper?
No. It depends on the fixed rates, future variable rates, usage, standing charges and exit fees.