Is it better to fix energy prices or stay on the price cap UK?

It depends on where energy prices are heading. If fixed deals are priced below the upcoming price cap, fixing saves money. If the cap is expected to fall, staying variable could be cheaper. In 2026, with the price cap at around £1,568 for a typical dual-fuel household, fixed deals priced below this are worth considering — but check the rate per kWh, not just the headline figure.

What is the energy price cap and how does it work?

The energy price cap limits how much suppliers can charge per unit of gas and electricity. It's set by Ofgem and reviewed quarterly (January, April, July, October). It doesn't cap your total bill — if you use more energy, you pay more. The cap sets maximum standing charges and unit rates. Suppliers can charge less than the cap, but most charge close to it.

What happens when my fixed energy deal ends?

When your fixed tariff ends, you'll automatically move to your supplier's standard variable tariff (SVT), which is capped by the energy price cap. You won't be left without energy, but the SVT may be more expensive than your fixed deal was. Start looking for a new deal 6-8 weeks before your fix ends. Most suppliers won't charge exit fees in the last 49 days.

Are there exit fees on fixed energy tariffs?

Some fixed tariffs have exit fees (typically £25-£100 per fuel), while others are exit-fee-free. You can usually leave without penalty in the last 49 days of your contract. Always check exit fees before signing up — an exit-fee-free tariff gives you flexibility to switch if cheaper deals appear.

Should I Fix My Energy Prices Now? — Price Cap vs Fixed Tariff Guide | PocketWise

Should I Fix My Energy Prices Now? — Price Cap vs Fixed Tariff Guide

Is it worth fixing your energy prices or staying on the price cap? Compare fixed tariffs vs variable rates, when locking in saves money, and how to decide for your household.

By PocketWise · 8 April 2026 · 3 min read

With energy prices fluctuating, choosing between a fixed tariff and the variable price cap is a key household decision. Here’s how to decide.

Fixed Tariff vs Price Cap — Key Differences

Feature	Fixed Tariff	Variable (Price Cap)
Rate changes	Locked in for 12-24 months	Changes every quarter
Price certainty	High	Low
Can it go up?	No (during fix)	Yes, each quarter
Can it go down?	No (during fix)	Yes, if cap falls
Exit fees	Sometimes (£25-£100 per fuel)	None
Switching	May cost during contract	Free anytime
Best for	Budget certainty	Flexibility, falling prices

How the Energy Price Cap Works

Element	What it caps
Unit rate (electricity)	Maximum pence per kWh
Unit rate (gas)	Maximum pence per kWh
Standing charge	Maximum daily amount
Review frequency	Every 3 months (Jan, Apr, Jul, Oct)
Typical household bill	~£1,568/year (Q1 2026 cap)

The cap sets the maximum rate — suppliers can charge less, and some do.

When to Fix Your Energy Prices

Fixing makes sense when:

Indicator	Why fix
Fixed deal cheaper than current cap	Guaranteed savings
Energy prices expected to rise	Lock in before increases
Winter approaching	Usage and prices typically higher
You want budget certainty	Same monthly payment regardless
Volatile wholesale markets	Protection from sudden rises

The Price Cap Forecast

Quarter	Expected cap (typical household)	Direction
Current	~£1,568/year	—
Next quarter	Check Ofgem forecast	Watch Cornwall Insight/analysts

If fixed deals are available below the current or forecasted cap, they’re likely worth taking.

When to Stay on the Variable Rate

Indicator	Why stay variable
Cap expected to fall	You’ll benefit from drops
Fixed deals above the cap	Fixing would cost more
You want flexibility	No exit fees, switch anytime
Short-term renter	May move before fix ends
Low energy user	Smaller potential savings

How to Compare — Unit Rates, Not Annual Estimates

Don’t just compare headline annual figures. Compare the unit rates and standing charges:

What to compare	Fixed offer	Current cap rate
Electricity unit rate (p/kWh)	e.g., 24.2p	e.g., 24.5p
Gas unit rate (p/kWh)	e.g., 5.8p	e.g., 6.0p
Electricity standing charge (/day)	e.g., 61p	e.g., 61p
Gas standing charge (/day)	e.g., 31p	e.g., 32p

If the fixed rates are lower across the board, fix. If they’re higher, stay variable.

Calculating Your Potential Savings

Your annual usage	Cap rate cost	Fixed rate cost	Annual saving
Typical (2,700 kWh elec, 11,500 kWh gas)	£1,568	£1,480 (example)	£88
Medium-high (3,500 kWh elec, 15,000 kWh gas)	£2,000	£1,890 (example)	£110
High (5,000 kWh elec, 20,000 kWh gas)	£2,800	£2,640 (example)	£160

Higher usage households save more from fixing at a lower rate.

Tips for Getting the Best Energy Deal

1. Use Comparison Sites

Ofgem’s accredited comparison sites: Uswitch, Compare the Market, MoneySupermarket
Check direct with suppliers too — some deals aren’t on comparison sites

2. Check for Exit Fees

Tariff type	Exit fee
Exit-fee-free fixed	£0
Standard fixed	£25-£100 per fuel
Last 49 days of contract	£0 (always fee-free)

3. Consider Your Usage Pattern

User type	Strategy
Low user (small flat, out all day)	Standing charge matters more
Average user	Unit rate matters most
High user (large house, WFH, EV)	Unit rate critical — fix if cheaper
Economy 7/10 (night storage)	Check specific multi-register rates

4. Set Calendar Reminders

When	Action
8 weeks before fix ends	Start comparing deals
4 weeks before fix ends	Lock in your best option
When fix ends	Check you’re on the new deal
Each quarter (Jan, Apr, Jul, Oct)	Review when price cap changes

Smart Meters and Switching

A smart meter makes switching easier:

Benefit	Detail
Accurate bills	No estimated readings
Easy switching	New supplier reads meter remotely
Usage tracking	See when you use most energy
Prepayment flexibility	Top up online instead of at shops

Energy Price Cap Explained — how the cap works
Energy Bill Support Schemes — help with costs
Energy Grants and Schemes — funding for efficiency
How to Complain About Your Energy Supplier — when things go wrong