Fixed Energy Tariffs Explained: Should You Fix Your Energy?

A fixed energy tariff normally locks your gas and electricity unit rates and daily standing charges for an agreed term. It can make budgeting more predictable, but it does not guarantee the cheapest deal or a fixed total bill. Whether fixing makes sense depends on the quoted prices, your usage and the contract conditions.

Your bill combines the energy you use with daily standing charges. On a conventional fixed-rate deal, the agreed prices stay the same for the contract period, subject to its terms. Use more heating or electricity and the total can still increase. Check the tariff information, including how any tax changes would be treated.

A fixed monthly Direct Debit is a payment arrangement, not proof that you have fixed energy prices. When comparing offers, look for the tariff’s unit rates and end date rather than relying on the monthly payment displayed in your account.

Standard variable prices can move up or down. A fix protects its agreed rates against a market rise during the term, but you do not automatically receive lower rates if prices fall. That makes fixing a choice about both cost and certainty. A long contract is not automatically better than a short one.

Do not confuse a fixed contract length with fixed prices. Some tracker products have an end date but still change their rates. Read what is guaranteed, rather than relying on the product name.

Use the same postcode, payment method and annual kWh figures for every quote. For a single-rate tariff, calculate each fuel’s usage multiplied by its unit rate, then add 365 days of standing charges. Divide pence by 100 to get pounds. Add the two fuels together and include relevant fees or contractual discounts. For time-of-use tariffs, calculate each rate period separately.

Illustrative example: 2,500 kWh of electricity at 25p costs £625. A 50p daily standing charge adds £182.50, giving £807.50 a year for electricity alone. These are invented rates to demonstrate the calculation, not a live tariff or an Ofgem average.

Build a small comparison with the annual cost, contract length, exit fee and any smart-meter requirement. Test whether the quote still appeals if variable rates stay unchanged, rise or fall. Do not treat one winter quarter’s forecast as the price for an entire year.

You may have to pay an exit fee before the final 49 days of a fixed contract. Check whether the charge applies separately to gas and electricity. Citizens Advice says you can switch with 49 days or less remaining without the early-exit charge described for longer remaining terms. Your supplier can confirm your exact dates and conditions.

For example, a hypothetical £60 fee for each fuel means £120 to leave a dual-fuel fix. If the replacement would save only £80 during the remaining period, the fee outweighs that saving. Also check what happens when your deal ends: you will usually move onto the supplier’s standard variable tariff unless you choose another offer.

Compare a personalised quote before deciding. A fix may suit you if its total cost is acceptable and you value predictable rates. Keeping flexibility may matter more if the available fix is expensive or your circumstances could change. January’s forecast is useful context, but it cannot guarantee that a particular deal will save you money.

MyEnergySavings does not currently compare live tariffs. Use this guide to assess quotes you obtain from suppliers or comparison services; an average-bill benchmark cannot identify the cheapest deal for your home.