Fixed vs variable energy tariff: which is cheaper now?
Ofgem says fixed deals were available £100+ below the October 2026 cap, and January forecasts are higher. How to compare a fix with your current tariff.
Numbers checked against official sources on 7 October 2026
In 30 seconds
- A variable (standard) tariff follows the Ofgem price cap, which changes every three months. A fixed tariff locks your rates for a set period.
- In late August 2026, Ofgem said fixed deals were available at £100 or more below the October cap. Uswitch counted 17 fixed deals below it, the cheapest about 10% lower.
- Forecasts for the January–March 2027 cap range from £1,872 to £2,165, all above today’s £1,723.
- Compare deals on the whole year’s cost for your own usage, check exit fees, and be wary of very long fixes.
When energy prices are rising, the question every household asks is whether to lock in a fixed deal or stay on the standard variable tariff and hope prices fall. There is no answer that is right for everyone, because nobody knows future wholesale prices. But you can make the decision with real numbers. Here is how the two types of tariff work, what the market looked like after the October 2026 price cap, and a simple way to compare.
On this page
Fixed vs variable: the difference
| Standard variable tariff | Fixed tariff | |
|---|---|---|
| Unit rates and standing charges | Change every three months, up to the Ofgem cap | Locked for the length of the deal |
| If wholesale prices rise | You pay more from the next cap | Your rates stay the same |
| If wholesale prices fall | You pay less from the next cap | You keep paying the fixed rates |
| Leaving early | No exit fee | May have an exit fee |
| Your bill still depends on… | how much energy you use: a fixed tariff fixes the price per unit, not your total bill | |
Ofgem says around 35% of households, about 11 million, are on fixed tariffs. The rest are on default tariffs protected by the price cap (Ofgem, 26 August 2026).
What the market looked like in autumn 2026
- The price cap rose 4% to £1,723 a year for a typical home from 1 October 2026. See the full rates.
- Ofgem said fixed tariffs were available at £100 or more below the October cap.
- Uswitch said there were 17 fixed deals below the new cap, with the cheapest about 10% lower (Irish News / PA, 26 August 2026).
Deals come and go quickly, so treat these as a snapshot, not today’s market.
What the forecasts say about January
Ofgem will set the January–March 2027 cap by 25 November 2026. In September, forecasts ranged widely (IBTimes):
| Typical annual bill | £ a year | vs October cap |
|---|---|---|
| October–December 2026 cap (actual) | £1,723 | – |
| A fix about 10% below the October cap | about £1,551 | −£172 |
| January forecast, Cornwall Insight | £1,872 | +£149 |
| January forecast, Uswitch average of suppliers | £2,117 | +£394 |
| January forecast, EDF | £2,165 | +£442 |
If the forecasts are right, a deal fixed below the October cap would look good over the winter. But forecasts have been wrong before, in both directions, and prices after March 2027 are even less certain.
How to compare a fixed deal with your current tariff
Do the sum for your own usage, not the “typical” home. You need your annual kWh from your bill or app:
Annual cost = (electricity kWh × unit rate) + (gas kWh × unit rate) + 365 × (electricity standing charge + gas standing charge)
- Use the same usage figures for every tariff you compare.
- Include standing charges: a deal with a cheap unit rate and a high standing charge can cost more if you use little energy.
- Add the exit fee to the fixed deal if there is any chance you will leave early, for example because you are moving home or plan to get a heat pump.
- Check the length. Uswitch’s advice in August was to look for deals cheaper than the cap, no longer than 12 months, and without significant exit fees.
Who might prefer each option
| A fix tends to suit you if… | Staying variable tends to suit you if… |
|---|---|
| You want certainty over the winter budget | You expect to switch soon, e.g. to a heat pump or EV tariff |
| You can find a deal below the current cap | The only fixes on offer are above the current cap |
| The exit fee is low or zero | Exit fees would cost more than the likely saving |
| You use a lot of gas, so winter rises hit you hardest | You are moving home in the next few months |
Getting a heat pump or solar soon? Many suppliers offer special tariffs for heat pumps, electric cars and solar exports, often with cheaper off-peak electricity. A long fix on a standard tariff could make switching to one of these more expensive. See export tariffs and heat pump running costs.
How switching works
According to Ofgem:
- suppliers must complete a switch within 5 working days, or pay you £40 automatic compensation;
- you can cancel a switch within 14 days;
- you generally can’t switch if you have owed your supplier money for more than 28 days. Prepayment customers can switch with debts up to £500.
You can also fix with your current supplier; ask what fixed deals it offers existing customers.
Frequently asked questions
Is it worth fixing my energy tariff now?
It can be if you find a deal below the current price cap with low exit fees, because forecasts point to a higher cap in January 2027. Forecasts can be wrong, so compare the whole year’s cost for your own usage.
Does a fixed tariff fix my bill?
No. It fixes your unit rates and usually your standing charges. Your bill still rises if you use more energy, for example in a cold winter.
What happens when my fixed deal ends?
If you don’t choose a new deal, you usually move onto your supplier’s standard variable tariff, which follows the price cap. Check your new rates when your fix ends.
Can I switch supplier if I am in debt?
Ofgem says you cannot switch if you have owed your supplier money for more than 28 days. Prepayment customers can switch with debts of up to £500.
Is prepayment cheaper?
Ofgem says prepayment customers pay the lowest price cap rates, about £45 a year less than Direct Debit on average.
