What is a fixed price energy tariff?
A fixed price energy tariff is when the cost of your energy remains the same for the length of your tariff agreement – usually the fixed pricing lasts for between one and four years.
Be aware though that it’s the cost of energy per unit that stays the same, so this doesn’t necessarily mean your bills will stay the same each month. The more energy you use each month, the more you will pay.
Are fixed price energy tariffs cheaper?
Fixed price energy tariffs can often be cheaper than variable tariffs due to high competition in the market. In fact switching from a standard variable tariff with one of the Big Six energy suppliers to the cheapest fixed price tariff could save you £295 per year*, according to MoneySuperMarket data.
*The average Big 6 standard variable tariff is £1,253 and the cheapest fixed rate tariff is with Utility Point at £959 - the difference is £295. According to MoneySuperMarket data, correct as of March 2019
But the actual amount you pay per month will also depend on:
- How much energy you use: if you live in a full household, or if you use plenty of gadgets and appliances, your energy bills are likely to rise
- Your home’s energy efficiency: homes that have poor insulation and old appliances can also see higher energy bills
- How you pay: some providers offer discounts if you pay by direct debit rather than credit or cheque
- Your meter: devices such as smart meters let you monitor your energy usage closer than traditional meters, which means it can be easier to spot when your bills might be going up
Are there any other benefits to fixed price energy tariffs?
Aside from potentially benefiting from cheaper bills, a fixed price tariff also offers the following advantages:
- More predictable billing: as the cost per unit of energy stays the same for the whole term, you won’t have to worry about fluctuations in price. This can make it easier to manage your budget
- Protection from price hikes: you’ll also be protected for the duration of your contract if the cost of energy suddenly goes up
Are there any disadvantages in fixed price energy tariffs?
The flipside of being protected from price hikes is that you won’t be able to take advantage if energy costs come down, as your unit price won’t change.
You might also be faced with exit fees if you’re on a fixed tariff and you decide to switch before the end of your contract.
However, a plus point is that some providers have started refunding exit fees paid to old suppliers when people switch to one of their tariffs. It may be something to check for when you compare tariffs.
Fixed price vs capped energy tariffs
Capped energy tariffs and fixed price tariffs both offer protection against increases in the unit price of gas and/or electricity.
But these tariffs are different - while fixed price tariffs mean the unit price will stay the same for the duration of your deal, capped tariffs only ensure that the unit price won’t go above a certain amount.
This means customers on capped energy tariffs may see their energy costs change, but you would also benefit from any price decreases.
How can I switch to a fixed price energy tariff?
The process of switching energy suppliers is much easier thanks to the Energy Switch Guarantee. It’s handled entirely by the company you’re moving to, and you’re guaranteed a hassle-free switch within 21 days.
You’ll stay on your old tariff until the process is complete, and you won’t be without gas or electricity at any point – if there are any issues, your new supplier will try to resolve it as soon as possible.
When you switch, any credit on your old account will be refunded with 14 days of your previous energy bill, and if you change your mind within 14 days you’ll be able to remain with your old supplier.
However, before you decide to switch it’s always a good idea to compare your options. With MoneySuperMarket you’ll be able to compare tariffs from energy providers across the UK, including gas, electricity, and dual fuel deals from the Big Six to smaller companies.
Comparing fixed price energy tariffs
Finding a better deal on energy tariffs is easier when you compare with MoneySuperMarket. All you need to do is tell us a little about yourself, your home, and your approximate energy usage – the more we know about your energy usage the more accurate your quote will be.
Then we’ll show you a list of quotes tailored to your energy needs, so you can compare deals by the monthly and yearly cost, as well as the type of rate you’ll be charged at and the yearly savings you could make by switching.
When you’ve chosen your new supplier and tariff, just click through to finalise your purchase – thanks to the Energy Switch Guarantee you’ll be with your new supplier within 21 days.