What are fixed price energy tariffs?
A fixed energy tariff is a type of energy deal where the unit rates and standing charges are fixed for the length of the deal. They are different to standard variable tariffs, where unit rates and standing charges change depending on the energy price cap.
Transcript
The two most common types of energy deal are either a fixed tariff or a standard variable tariff.
A fixed tariff is when the price you pay for each individual unit of gas and electricity, as well as your standing charge, is locked at a set amount for the duration of your contract.
"Standard variable tariff" means that your standing charge and unit cost for both gas and electricity are determined by the Ofgem energy price cap and can fluctuate every three months based on the wholesale market.
Don't forget that your energy bill is still calculated based on how much energy you actually use - the more you use, the more you'll pay, no matter what type of tariff you're on.
At the moment, most UK households are on a default or standard variable tariff due to the ongoing energy crisis, which has meant there are very few fixed energy tariffs available to switch to.
If you're currently on a standard variable tariff, you won't have exit fees, so if you're looking for more certainty over the cost of your energy you can switch to a fixed tariff without paying anything extra.
Visit Uswitch.com find out more.
How do fixed energy deals work?
Fixed price gas and electricity tariffs guarantee that their unit rates won't go up or down. This is attractive because it offers price certainty against an unpredictable energy market.
However, signing up for a fixed price energy plan doesn't mean you'll be paying the same amount for your energy bill each month. If you use more energy one month than another, the bills you will receive will differ accordingly. The rate you pay for each unit of energy will be frozen for the duration of the contract, not the total bill.
Fixed rate energy plans also sometimes include an early exit fee, which you will have to pay if you decide to switch tariff before the end of your contract.
Fixed energy deals can be a gamble. If energy prices rise, you stand to make some big savings against a standard variable tariff. If they don't, you could end up paying over the odds and be faced with an early exit fee should you decide to switch.
Why do I need to know when my fixed price plan ends?
The date your fixed price energy plan ends should be one that's marked in your diary. Our video explains why.
Transcript
Hi! If you’re on a fixed rate tariff, the date it ends is one you definitely need to put in your diary. Here’s why.
With a fixed rate tariff, the fee you pay per unit of energy, and the daily standing charge, are set in stone for the duration of the plan. When your fixed plan comes to an end, it’s likely you’ll be rolled onto a standard plan. Standard plans are often more expensive than fixed plans and normally are variable, meaning you have the risk that energy fees can go up or down. This means that your bills could increase and you end up paying more for the same energy.
It's a good option to lock in a fixed rate around the same as - or cheaper than - the rate you’re paying now to save more and maintain your peace of mind.
When does my fixed plan end?
Your fixed plan will end on a set date, but you don’t need to wait until then to switch. You can move to a new plan 49 days before your current plan ends without paying an exit fee. Your supplier should let you know when your plan is coming to an end, but you don't have to wait to receive the reminder. If you’re within the 49-day limit, you can still check your bill or run a comparison.What are you waiting for?
How easy is it to switch?
It generally takes 21 days to switch [NB: since the recording of this video, this has changed to five days], but the process can be quicker. You won’t be charged twice or be without an energy supply at any point, so your switch should be completed without any issues. And remember, switching the plan you’re on doesn't always mean changing the supplier - if you’re happy with the supplier you’re with, they might have a cheaper tariff available you can switch to, rather than their default plan.
To find a new fixed rate, use Uswitch to make sure you’re getting a deal that matches your needs. Go to uswitch.com to get started.
What should I do when my fixed price energy plan ends?
When your fixed rate energy plan is about to end, the first thing to do is find out which plan your supplier will be moving you to. This will probably be your supplier's standard variable tariff, although some suppliers may offer you the chance to fix your prices again.
Once you know what energy plan you're being moved to:
Compare all available energy plans online and find out how your new plan compares to other deals
Switch your gas and electricity supplier if you find that you could be saving money with another energy supplier.
If you're thinking about switching to a fixed price energy deal, you can compare energy prices to see what's currently available by entering your postcode below.
Run an energy comparison
Enter your postcode below to compare energy prices and get started on your energy switch.
Should I fix my energy prices?
It's up to you whether to choose a fixed price energy deal or not. Fixed price energy tariffs are usually a solid option, offering security at the very least, plus big savings when you switch at the right time.
Fixed energy deals are returning to the market. If you're eligible for a fixed deal, you may want to take it to be certain about the price you'll pay and protect yourself against future price cap rises. However, there are some caveats to be aware of - check out our dos and don'ts of fixing your energy deal here.
Many fixed price energy plans offer better value than standard variable tariffs, and even the slightly more expensive options will save you money if energy prices rise in the near future.
Case study "Thanks to a friend’s suggestion I first used Uswitch to switch my energy provider last year. I was pleasantly surprised by how simple the process was. I loved that all I had to do was pick the deal I wanted and everything else would be taken care of. There was no disruption in service, and I was paying about £20 less every month on a fixed plan."
Charles, Uswitch customer
How else can I control my energy prices?
The simplest way to ensure your energy costs don’t go up, whether you choose a fixed energy deal or not, is to control your usage. Whether prices go up or down, if you can reduce your usage you will always be in control of your energy bills.
The simplest changes can be made around the home. Checking for draughts around windows and doors is simple, and installing draughtproofing is cheap and easy to do. It will also save you a lot of money, with an estimated 30% of heat in the home lost through draughts. The most common culprits are around doors and windows, but you should also check floorboards, loft hatches and letterboxes.
Other simple changes include dropping the thermostat by just one degree and checking your timers are accurately set up, particularly after the clocks go forward or backwards. We have a selection of energy-saving guides here.
You could also consider purchasing a smart thermostat. These devices allow you to control your heating remotely and in some cases even adapt your home’s temperature to best suit your needs, without you having to lift a finger. The data a smart thermostat provides should also enable you to work out the most energy-efficient way to heat your home as well as save money.
Another way to cut your usage is to generate your own energy. Solar panels or wind turbines allow you to produce your own energy which you can then use, reducing your overall energy consumption.
