Compare fixed rate tariffs
What is a fixed rate energy tariff?
A fixed rate energy tariff guarantees the unit rates and standing charges of your gas and electricity for a set period of time, meaning you’ll be protected from any energy price rises. It doesn’t mean your energy bills will stay the same price for that period – they’ll go up or down depending on how much gas or electricity you use.
You’re generally locked into a fixed rate tariff for the whole of the term and will have to pay exit fees if you want to end it early. While most fixed rate tariffs last 12 months, some suppliers offer longer terms, up to three or even four years.
What happens when my fixed energy tariff ends?
When your fixed rate contract comes to an end, you’ll most likely be moved on to your energy supplier’s standard variable tariff (SVT). In normal times, the SVT would typically be more expensive than the fixed rate you’ve been used to.
It’s usually advisable to start shopping around and looking for a new fixed rate deal within 49 days of your deal ending – that way you won’t be charged an exit fee for leaving early. This is known as the ‘switching window’.
However, these are unprecedented times. While SVTs are typically more expensive than fixed rate tariffs, it might not be the case during the current energy crisis. If your fixed rate tariff is coming to an end and you can’t find a cheaper deal elsewhere, it’s probably best to stay on your supplier’s SVT until more reasonable deals are available again.
What are the advantages of a fixed rate tariff?
In normal circumstances, many customers may benefit from cheaper bills on a fixed rate tariff.
The pros of a fixed rate tariff include:
- It can be good for budgeting as the unit rate remains the same for the length of your contract
- Fixed rate tariffs can usually work out cheaper than variable tariffs
- You’ll be protected from price hikes when the oil and gas markets are volatile.
What are the disadvantages of a fixed rate tariff?
While it’s good to know you’re protected from sudden prices rises during your contract, there are some downsides to a fixed rate tariff.
Fixed rate tariff cons include:
- If energy prices fall, your unit rate will remain the same
- Some fixed rate tariffs only apply to the unit rate, so if your supplier’s standing charge goes up, so will your bills
- If you want to leave your contract early, you could be hit with a hefty exit fee
- Once your deal is up, if you don’t switch, you’ll be put on your supplier’s standard variable tariff (SVT), which will typically be more expensive.
What’s the difference between a fixed and variable tariff?
Unlike a fixed tariff, with a variable tariff the price of your energy can go up and down according to energy rates at the time.
Variable tariffs are flexible because you’re not usually tied into a contract. You can change supplier (or tariff) whenever you like, without any restrictions like exit fees. The downside is that flexible tariffs tend to be more expensive.
What happens to your fixed rate tariff if your supplier goes bust?
If your energy supplier goes bust, you don’t need to worry about your energy being cut off. However, your fixed rate tariff will effectively end immediately. Ofgem have protective measures in place to ensure that your supply isn’t disrupted, which will see your energy supply transfer to a new provider. This means you won’t be on the same deal you were on before, and all transferred customers will usually be placed on the new supplier’s standard variable tariff.
The standard variable tariff is usually a supplier’s most expensive, which means you’ll want to try to negotiate a better deal. Unfortunately, during the current energy pricing crisis, better deals are increasingly hard to find.
You can find out more about what happens when your energy supplier goes bust.
Can a fixed rate energy tariff save me money?
Fixed rate tariffs tend to be one of the cheaper options and are good for budgeting. As long as your energy use year-on-year is consistent, your bills will be around the same amount, as the same rate is applied to your usage.
If you use more gas and electricity in the winter months, you’ll need to make sure you factor this in when you budget your household expenses. Your annual consumption from last year should give you an idea of what this is, so check your old bills or online account. If you need a hand to calculate it, we can help you estimate this when doing a quote.
The drawback of fixed tariffs is that if energy prices go down you won’t benefit because you’re locked into paying the fixed price until the end of the term.
What other options are available if I choose a fixed rate tariffs?
With a fixed rate tariff, the amount you pay for each unit of energy and the daily standing charges are fixed to a set date in the future. While these tariffs will help protect you from energy price rises, the size of your bill will ultimately depend on how much energy you use.
Within fixed rate tariffs there are various options you can consider and choose to suit your needs:
- Single or dual fuel – you buy gas and electricity from different suppliers (single fuel) or from the same supplier (dual fuel), which is often more convenient and can sometimes give you a cheaper deal. Dual fuel tariffs can be fixed or variable.
- Online account or paper billing – running your energy billing online offers potential savings and ease, because there’s no paperwork for your supplier to post to you. All correspondence and account management is done online. Some suppliers will charge you an extra fee if you want paper bills sent in the post.
- Green tariffs or normal tariffs – green tariffs have a focus on the environment, such as sourcing energy from renewables. Normal tariffs will source their power from a variety of typical sources which may or may not include renewables.
- Timed economy tariffs or standard all-day tariffs – timed pricing such as economy 7 – offer cheap ‘off-peak’ energy during certain times. Anything outside of those hours can be a lot more expensive. All other types of plan just charge the same amount whatever time of day you use the gas or electricity.
Need more detail? Read our guide, energy tariffs explained.
How can I compare fixed rate energy tariffs?
As a result of the current energy crisis, many suppliers have removed their energy tariffs from the market. This means we can’t compare energy deals right now. The good news is, when deals become available again, we’ll be ready and waiting to help you compare energy suppliers.
When looking at deals, simply select the ‘fixed rate tariff’ option when we ask which tariff you’re interested in. Then choose a quote that suits you and apply online.
Don’t forget - it’s worth having a look to see whether you can get a cheaper deal if you choose both gas and electricity from the same supplier or different suppliers.
Frequently asked questions
What is the Energy Price Guarantee?
With the wholesale cost of gas and electricity continuing to soar, the government introduced the Energy Price Guarantee on 1 October 2022 to protect customers.
The new scheme, which replaces the Energy Price Cap for now, will reduce the unit cost of gas and electricity until 31 March 2023. This means that a typical British household should pay less for their energy this winter than previously predicted. The unit cost is due to rise again in April 2023.
Find out more about the Energy Price Guarantee.
Will the Energy Price Guarantee affect fixed rate tariffs?
Yes. Unlike the Energy Price Cap, the EPG can affect fixed rate tariffs, depending on how much you pay for your unit rate and standing charge.
With the new Energy Price Guarantee, customers with typical usage paying by direct debit should pay on average:
- Gas - £0.34 per/kWh
- Electricity - £0.10 per/kWh
If your fixed rate tariff is more expensive than the EPG, you’ll receive a reduction, so your unit rate is in line with the EPG.
If you’re on a low-rate fixed deal that’s cheaper than the EPG, you won’t receive any further reduction to your current tariff.
Are there any fixed rate deals available?
Given the current market situation, it’s unlikely you’ll find a fixed rate deal lower than the government EPG right now. Most energy suppliers have withdrawn their fixed rate energy deals completely.
Energy prices have been frozen at around £2,500 a year for the average household until April 2023, when they are due to rise to £3,000. If you’re currently in the market for a new tariff, it may be better to wait until the crisis passes and cheap fixed deals are available again.
