Should I fix my energy or not?

Ofgem’s energy price cap has been reduced by 7%, so a household using a typical amount of gas and electricity will see their annual bill fall by £129.

That works out to about £11 a month.

But with the colder months just around the corner, you might be asking if you should fix your energy deal now or stick with a variable tariff.

The truth is there’s no right or wrong thing to do.

It depends on you and your personal situation.

So let’s take a look at what you should weigh up before deciding.

What is the energy price cap?

The energy price cap limits how much suppliers can charge per unit of gas and electricity. 

But it doesn’t cap your total bill - the amount you pay depends on how much energy you use.

The price cap applies to households on standard variable tariffs, which are the default tariffs for customers who haven’t switched to a fixed-rate deal. 

What does fixing your energy bill mean?

A fixed energy deal locks in your unit rates (and sometimes the standing charge) for a set period, usually 12 or 24 months. 

Pros of fixing your energy bill

There are several advantages of going for a fixed deal, such as:

Certainty over costs

You know what you’ll pay each month, which can make a big difference if you’re closely watching your household budget.

Protection from price hikes

If prices go up again, it won’t affect you until your fixed term ends.

Peace of mind

You don’t have to worry about checking the price cap every three months.

Cons of fixing your energy bill

Although fixing might be a good option for some households, there are some reasons why it might not be right for you...

You could miss out on cheaper prices 

If the price cap drops further, you might be left paying a higher rate on your fixed deal.

Early exit fees

Some fixed deals charge you to leave early, making it harder to switch again if prices change.

Not all deals are good deals

Some fixed tariffs may be higher than the current energy price cap.

So… what should I do?

It depends on what matters most to you.

If you value stability and certainty, and you’ve found a fixed deal close to or lower than the current cap, it might be worth locking in now.

But if you’re willing to take the risk that prices could rise or fall, and prefer the flexibility of switching later, then staying on a variable tariff might suit you better.

So before making any decisions:

• compare deals carefully
• check if you’ll have to pay exit fees
• think about how much energy you use
• don’t rush into making a decision

Ofgem itself recommends getting independent advice before you make a decision.

But remember, nobody knows exactly where prices will go, especially in today’s uncertain world.