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Fixed vs variable energy tariff: which is better for your home?

Updated June 2026 8 min read

Quick verdict

A fixed tariff is usually better if you want price certainty for 12 to 24 months and the deal is close to or below the current price cap. A variable tariff is better if you value flexibility, want no exit fees, or expect prices to fall.

Option A

Fixed tariff

Your unit rates and standing charges are locked for a set period, usually 12 or 24 months.

Option B

Variable tariff

Your rates can change with the Ofgem price cap or supplier tariff changes, but you can usually leave without exit fees.

Side-by-side comparison

Fixed tariffs win on budget certainty and protection from price rises. Variable tariffs win on flexibility and no exit fees.

Price stability

Fixed tariff

Locked for contract lengthBetter

Variable tariff

Can change every cap period

Typical annual cost

Fixed tariff

£1,590 to £1,700 in examples

Variable tariff

Around price cap level

Exit fees

Fixed tariff

£30 to £60 per fuel may apply

Variable tariff

Usually noneBetter

Smart tariff access

Fixed tariff

Often availableBetter

Variable tariff

Limited on standard variable

Risk of price spikes

Fixed tariff

Protected during fixBetter

Variable tariff

Exposed to cap changes

Best for

Fixed tariff

Budget certainty

Variable tariff

Flexibility

Pros and cons

Fixed tariff pros and cons

Pros

  • ✓Prices locked
  • ✓Easier budgeting
  • ✓Can protect against rises
  • ✓Some deals beat the cap
  • ✓May include smart rates

Cons

  • -Exit fees can apply
  • -You miss out if prices fall
  • -May need a smart meter
  • -You need to switch again at the end

Variable tariff pros and cons

Pros

  • ✓No exit fees
  • ✓Can benefit if prices fall
  • ✓No fixed contract
  • ✓Simple default option

Cons

  • -Prices can rise
  • -Less budget certainty
  • -Fewer smart or EV tariff options
  • -May be more expensive than best fixes

Cost examples

Price cap flat

If variable prices stay flat, the difference may be small and a fix is mainly about certainty.

Fixed example
£1,620

Price cap rises

A fixed tariff protects you from a price cap rise during the fixed term.

Example saving
£185/yr

Price cap falls

A variable tariff can be cheaper if prices fall and your fix has exit fees.

Flexibility
Variable

When to choose Fixed tariff

  • ›You want stable monthly budgeting
  • ›The fixed deal is close to or below the cap
  • ›You expect prices to rise
  • ›You have an EV or smart tariff option
  • ›You are staying long enough to use the contract

When to choose Variable tariff

  • ›You may move or switch soon
  • ›You want no exit fees
  • ›You expect prices to fall
  • ›You do not want a fixed contract
  • ›You are comparing short-term options

Related calculators

Home & Bills

Electricity Cost Calculator

Estimate household electricity bills from usage, unit rate and standing charge.

Use calculator

FAQs

Is a fixed tariff cheaper than variable right now?

It depends on current offers and your usage. Many fixes can be close to the price cap, so compare unit rates, standing charges and exit fees.

Can I leave a fixed tariff early?

Usually yes, but exit fees may apply unless you are within the cooling-off period or near the end of the contract.

What happens when my fixed tariff ends?

You normally move to a default variable tariff unless you choose another deal.

Do I need a smart meter for a fixed tariff?

Not always, but some smart, EV or time-of-use deals require one.

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