⚖️ Comparison · Updated for 2026
Fixed energy tariff vs Variable tariff
Side-by-side comparison, when-to-use-each guide, and instant conversion. Reviewed for 2026.
Quick answer: Fixed tariff: unit rate locked for 12-24 months. Protected from price rises but can't benefit from falls. Variable tariff: rate moves with the wholesale market, capped by Ofgem quarterly. Fixed makes sense when wholesale prices are expected to rise; variable when prices are at or near the cap floor.
Decision guide — when to use which
Use Fixed energy tariff when…
When wholesale prices are rising or you want budget certainty.
Use Variable tariff when…
If you expect energy prices to fall, or need flexibility — no exit fees, can switch anytime, benefits from price drops. Suits households with smart meters and flexible usage.
📊 Side-by-side comparison
| Aspect | Fixed energy tariff | Variable tariff |
|---|---|---|
| Rate certainty | Locked for term | Moves with market |
| Early exit fee | Usually £50-150 per fuel | Usually none |
| Ofgem price cap applies | No | Yes |
| Best timing | When market prices rising | When prices at/below cap |
Frequently asked
?
What is the Ofgem price cap?
A cap on the unit rate and standing charge suppliers can charge for the default tariff. Updated quarterly based on wholesale energy costs. It doesn't cap your total bill — only the per-unit rate.
?
Can a fixed tariff be more expensive?
Yes. If wholesale prices fall faster than anticipated, the cap can drop below your fixed rate. This happened in 2023 when many people on long fixed deals paid more than cap customers.
Reviewed for 2026. All conversion factors and historical references verified against official sources (ISO standards, government weights & measures legislation, IEC technical specifications). Built by a UK-based qualified primary teacher and FA Level 2 coach as part of 247QuickTools' free utility-tools project. We don't sell SEO links or accept paid placements in this content.