Fixed versus variable energy tariffs
A fix buys certainty, not cheapness. Whether it also turns out cheaper depends on what wholesale prices do next, which nobody knows.
What each one is
A variabletariff moves with Ofgem’s price cap, which is reviewed every three months. Your unit rate and standing charge can change at each review, up or down, and there is normally no exit fee.
A fixedtariff holds its unit rate and standing charge for a set term, usually 12 or 24 months. It commonly carries an exit fee for leaving early. At the end of the term you move onto the supplier’s variable tariff unless you do something.
What a fix does and does not fix
It fixes the rates, not the bill. If you use more, you pay more. A “fixed £95 a month” arrangement is a direct debit amount, not a fixed price — the account still settles against actual usage, and the debit gets revised.
The honest position on which is cheaper
Nobody knows. A fix priced above the current cap is a bet that the cap will rise; a variable tariff is a bet that it will not rise much. Both bets have been right and wrong in the last few years.
What can be said without forecasting: a fix is worth more to a household that would struggle with a sudden increase than to one that would absorb it. That is a question about your circumstances, not about the market.
Exit fees, and the last few weeks
Leaving a fixed deal early usually costs a fixed amount per fuel — often £25 to £75 each, sometimes more. That has to come out of the first year’s saving, and where the saving is modest it can wipe it out entirely.
One thing worth knowing: suppliers generally waive exit fees in the final weeks of a fixed term, most commonly the last 49 days. If your deal is nearly over, waiting may remove the fee. Check your own terms — the period is not the same everywhere.
What to compare
Not the unit rate. A tariff can win on unit rate and lose overall because its standing charge is higher, and it can win on both and still cost money in year one after an exit fee. Compare annual totals on your usage.
Which tariff wins genuinely depends on how much you use, because a standing charge is spread over less energy in a low-usage home. Two households looking at the same pair of tariffs can correctly reach opposite conclusions.
What price cannot tell you
Billing accuracy, how quickly a meter reading is processed, and what happens when something goes wrong. None of that is in the rates, and all of it matters. A slightly more expensive supplier that bills correctly is not obviously the worse choice.
The tariff comparison works out annual totals for two tariffs on your own usage, including standing charges and exit fees, and tells you when the difference is too small to act on.