Fixed energy tariff vs Variable tariff
Side-by-side comparison, when-to-use-each guide, and instant conversion. Reviewed for 2026.
When wholesale prices are rising or you want budget certainty.
If you expect energy prices to fall, or need flexibility — no exit fees, can switch anytime, benefits from price drops. Suits households with smart meters and flexible usage.
| Aspect | Fixed energy tariff | Variable tariff |
|---|---|---|
| Rate certainty | Locked for term | Moves with market |
| Early exit fee | Usually £50-150 per fuel | Usually none |
| Ofgem price cap applies | No | Yes |
| Best timing | When market prices rising | When prices at/below cap |
Frequently asked
What is the Ofgem price cap?
A cap on the unit rate and standing charge suppliers can charge for the default tariff. Updated quarterly based on wholesale energy costs. It doesn't cap your total bill — only the per-unit rate.
Can a fixed tariff be more expensive?
Yes. If wholesale prices fall faster than anticipated, the cap can drop below your fixed rate. This happened in 2023 when many people on long fixed deals paid more than cap customers.
Frequently asked questions
What is the Ofgem price cap?
A cap on the unit rate and standing charge suppliers can charge for the default tariff. Updated quarterly based on wholesale energy costs. It doesn't cap your total bill — only the per-unit rate.
Can a fixed tariff be more expensive?
Yes. If wholesale prices fall faster than anticipated, the cap can drop below your fixed rate. This happened in 2023 when many people on long fixed deals paid more than cap customers.