Fixed-Rate Energy Tariffs: Terms, Lengths and What Is Actually Fixed

A fixed-rate energy tariff sets the price you pay for each unit of gas and electricity, and usually the daily standing charge, for an agreed period, most often 12 to 24 months¹. During that period the supplier cannot put those prices up, even if it raises them for customers on other tariffs, unless the government changes VAT³. That is the whole of the guarantee, and it is a narrower promise than many people assume: what is fixed is the unit price, not your energy bill¹.

The bill still moves, because the amount you are charged is set by three things: the amount of energy you use, the unit cost and the daily fee³. Only the last two are locked. Use more, and you pay more, at the same rate. This distinction matters most for households trying to budget, because a fixed tariff removes price risk but not usage risk, and it does not stop a supplier from raising your monthly direct debit if you are burning more energy than it expected³.

For a household working towards energy independence, a fixed tariff is a pricing tool, not a power source. It buys certainty about the cost of what you import, which is genuinely useful when you are investing in solar, batteries or a heat pump and want predictable running costs. It does nothing to reduce your dependence on the grid, your supplier or the wholesale market, and it can lock you out of newer time-of-use deals that reward shifting your consumption. This page explains exactly what a fixed deal fixes, the terms attached to it, and where it leaves you exposed.

The unit rate and the standing charge are what a fixed deal locks

A fixed rate tariff lets you pay a set amount for each unit of energy until a set end date⁴. The word "fixed" refers to the price per kilowatt hour of gas and electricity used⁹, and on most deals the daily standing charge is locked at the same time. Fixed energy deals lock in the unit rates and standing charges you pay over the duration of the contract². Everything else, the number of units you burn, is yours to manage.

That means the guarantee behaves like a ceiling on price, not a ceiling on cost. The amount you are charged is set by the amount of energy you use, the unit cost and the daily fee, and only the unit cost and the daily fee are fixed³. A cold winter, an extra person in the house or a new appliance all raise the bill on a fixed tariff exactly as they would on any other. What they cannot do is expose you to a supplier's price rise, because the price you pay per kWh will not go up when the wholesale energy market does⁵.

The protection also has a time limit. The rate holds for the length of the contract, and no longer. When the term ends the deal ends with it, and the household is back in the open market unless it acts. This is why the length of the term, and the exit fee attached to leaving it early, matter as much as the rate itself when comparing deals.

Signs your current deal is already fixed

The check takes a few minutes. Look at your latest energy bill or statement, or your supplier's app or online account, where tariff details are usually shown¹⁰. If it says your contract has an end date, you are on a fixed tariff³. If there is no end date, you are almost certainly on your supplier's standard variable tariff, the default rate that follows the energy price cap.

When you find the details, note the things worth comparing across deals: the unit rates and standing charges, whether prices are fixed or can change, the length of any fixed-term contract, the payment methods available, the supplier's customer service record, and any additional benefits or incentives¹⁰. Those six factors, not the headline rate alone, determine whether a deal is worth taking.

There is good reason to check rather than assume. Ofgem's research on consumer tariff choices found considerably more people claiming to be on fixed tariffs, 38 per cent, than the official data suggests, 11 per cent¹¹. Among those who say they are on a fixed electricity tariff, 55 per cent report being "very confident" that is the case, while 38 per cent say they are only "somewhat" confident¹¹. A meaningful share of households believe they have price protection they do not actually have, and the only reliable way to know is to read the bill.

How fixed, variable and capped tariffs work

The UK market offers three broad shapes of pricing, and they protect a household in different ways.

• Fixed. The unit rate and standing charge are set for the contract term. The supplier cannot raise them mid-term, except for a VAT change³. Fixed tariffs are usually the cheapest tariff type available on the market⁶.
• Variable. If you do not fix, you typically pay a provider's default, variable rate, which is determined by the energy price cap and changes every three months¹². Standard variable tariff customers can switch at any time without incurring any fees¹³.
• Capped. The price cap protects households on a standard variable or default tariff, including those using a prepayment meter, paying by direct debit or standard credit, with any supplier¹⁴. It is not a cap on your bill, and your capped tariff depends on how you pay, where you live, and what type of meter you have¹⁴.

The cap deserves its own clarity, because it is often confused with a fixed deal. The price cap sets a maximum on the rates suppliers can charge for standard variable tariffs¹⁵. Around 11 million households are on a standard variable tariff or a tariff they have not chosen¹⁶. If you are on a fixed-term energy tariff that you have chosen, your prices are not protected by the caps¹⁶: you have traded the cap's ceiling for a rate you selected yourself, which may sit above or below it.

Which shape suits which household is a question about exposure. A fixed deal suits a household that wants certainty about the price of what it imports and is willing to accept the terms attached, chiefly the term length and possible exit fees. A variable tariff suits a household that wants to keep every option open, since it can switch at any time without a fee¹³, and that accepts the rate moving every three months with the cap. The capped route is not a choice so much as a floor of protection for those who have not chosen a deal.

Choosing between 12, 24 and 36 month terms

Fixed rate tariffs are sold in a spread of lengths. You can get a fixed rate tariff for 12, 24 or even 36 months⁵, though the market's centre of gravity is shorter. Most sources describe the usual term as one to two years: fixed energy deals typically run 12 to 24 months², and the fixed period is usually somewhere between 12 and 24 months⁹. Others put it more simply: fixed tariffs usually last for a year³, usually 12 months but sometimes as long as three years⁶, or usually between one and three years¹. On dual fuel fixed deals the typical term is again around 12 months¹⁷.

The spread exists because suppliers price different lengths differently, and the differences reflect real uncertainty. A longer fix extends certainty further into the future, but it also extends the commitment, and the exit fee rules that come with it, further too. Ofgem's consumer research tested households' reactions to a 12-month fixed term, a 24-month fixed term and a standard variable tariff, which confirms that these are the lengths the market actually competes on¹¹.

What most people choose is best read from behaviour rather than from any single deal. Guidance on switching habits suggests households treat fixing as something to revisit every 12 to 18 months¹⁸, which fits a market where one-year deals dominate and two-year deals are the main alternative. A household fixing today is therefore usually choosing between 12 and 24 months, with 36-month deals available but less common⁵.

Fixed tariff prices compared with the price cap

A fixed deal is quoted as unit rates and a standing charge, and the honest comparison is against the price cap that governs the standard variable tariff you would otherwise sit on. The cap covers you if you are on a default tariff and pay by standard credit, direct debit, prepayment meter or Economy 7 meter¹⁹. It changes every three months, so a fixed deal that beats the cap today may not beat the cap in a year's time, and vice versa.

The market data on this is sobering for anyone who assumes a fix is automatically cheaper. An independent tariff watch counted 337 fixed price tariffs more expensive than the current Ofgem price cap, and 206 tariffs that will still be more expensive than the predicted January price cap²⁰. Earlier in the period, households on 274 different tariffs had fixed the price of their energy at a level above the then cap²⁰. Fixing is a bet on future wholesale prices, and a large share of the bets on the market at any moment are losing ones relative to simply staying on the capped rate.

That does not make fixing wrong; it makes the comparison the whole job. A household that fixes above the cap is paying a premium for certainty, and should know it is doing so. A household that fixes below the cap has captured a saving that persists even if the cap later falls. The figures above are counts of tariffs, not a verdict on any particular deal, and they move as the cap resets each quarter. The discipline is to compare the fixed deal's unit rates and standing charge against the capped rates on the day, and to remember that the cap itself is not a fixed price¹⁵.

The drawbacks of fixing your energy price

The limitations are structural, and worth stating as firmly as the benefits.

• Falling prices pass you by. The price you pay per kWh will not increase when the wholesale market does⁵, but the same lock works in reverse: if wholesale prices and the cap fall, a fixed rate above the market stays above it. The tariff watch counts show how common that position is²⁰.
• Exit fees. Most fixed tariffs include exit fees for each fuel, payable if you want to switch to a different deal before the contract ends⁶. On a dual fuel fixed term tariff you pay an exit fee for both types of energy if you leave early¹⁷. You may have to pay your previous supplier an exit fee if you were on a fixed rate tariff and chose to leave before it ended²¹.
• Lock-in against better products. Time-of-use, tracker and smart-meter deals all evolve quickly. A household locked into a fixed rate for 24 months may watch cheaper or more flexible tariffs appear and be unable to move without paying for the privilege. Welsh Government guidance drawn up with consumer experts recommends choosing a tariff with low or no exit fees, in case circumstances change and you want to cancel early⁶.
• The direct debit can still move. A fixed tariff does not protect you from your direct debit amount increasing or decreasing⁶. Payments have probably gone up because you are using more energy than your supplier expected, while the price of energy and the daily fee stay the same³.

Consumer understanding of exit fees is patchy in ways that matter. Ofgem's research found 88 per cent know exit fees may apply when leaving a fixed contract before it ends, but only 57 per cent know they may still apply even when moving to another deal with the same supplier¹¹. Among consumers who thought they had an exit fee on their current contract, 93 per cent found no-exit-fee deals available¹¹, which suggests the fees are more avoidable than many assume.

Who can qualify: meter type, payment method and prepayment

Fixed deals come with conditions, and three of them shape what a household can actually sign.

Smart meters. Some cheaper tariffs are only available if you have a smart meter, so refusing one excludes you from them²². Switching from an existing gas or electricity prepay meter to a smart credit meter is straightforward for customers who qualify²³. A smart meter is not a condition of every fixed deal, but it is a condition of the cheapest tier of the market.

Payment method. How you pay affects what you are charged even under the price cap, where the capped tariff depends on how you pay, direct debit or standard credit, where you live and what type of meter you have¹⁴. Direct debit is the payment method most fixed deals are priced around.

Prepayment. Prepayment meters require you to pay for your energy before you use it⁶, topped up via a token, key or smartcard, online or through an app⁹. Fixed deals exist for prepayment customers, and official guidance confirms prepayment is one of the payment methods covered by the price cap¹⁹. The range is narrower than for credit customers. Once any debt on the account is settled, the supplier may be able to change the prepayment meter to a credit meter, which widens the choice of fixed deals⁶. Prepayment customers at risk of disconnection are also served by hardship schemes such as fuel banks²⁵.

The tariff types offered by energy suppliers include standard variable, renewable, electric vehicle, fixed price and prepayment tariffs²⁶, so a household's meter and payment setup determine which of those doors are open before any price comparison begins.

Mid-term price changes and VAT explained

On a fixed-rate tariff the supplier cannot increase your prices for the time they are fixed, unless the government raises VAT⁷. Citizens Advice states the rule plainly: "Your supplier can't increase the price you pay, unless the government has raised VAT."³ The same exception appears in consumer rights guidance, which adds one more wrinkle: prices cannot increase during the fixed period unless the government raises VAT or the tariff is staggered⁷. A staggered tariff sets its rates in stages across the term, so a deal described as fixed can still carry a scheduled step-up written into its own terms. Checking the terms for the word "staggered" before signing avoids that surprise.

VAT is therefore the one government lever that can move a fixed bill, and it is currently moving. As part of a UK Government cost-of-living decision, VAT on domestic electricity in Great Britain is cut from 5 per cent to 0 per cent from 1 October 2026 to 31 March 2027, worth roughly £45 a year on a typical bill, while gas stays at 5 per cent²⁷. The cut applies to unit rates and standing charges on all domestic electricity tariffs, including pay-as-you-go, and is applied by suppliers rather than requiring any action from the household²⁸. Unless the government extends the measure or makes it permanent, the rate is due to return to 5 per cent from 1 April 2027²⁷.

For a household on a fixed deal this cut arrives automatically, but it is a reminder of the boundary of the guarantee: the supplier's half of the bargain is fixed, the government's half is not. A fixed tariff protects against the wholesale market and the supplier's pricing decisions⁵. It does not protect against tax.

Your last 49 days and what happens when the term ends

Every fixed term ends, and the rules around the ending are the most useful things on this page to diarise.

Your supplier is required to contact you 42 to 49 days before the end date of your fixed-term tariff, informing you that it is coming to an end⁷. From 49 days before the end, exit fees cannot be charged: you have the right to switch freely without being charged⁷. Your provider cannot charge exit fees if you switch within 49 days of your current deal ending⁸, and if there is an exit fee attached, you can switch for free within the last 49 days of your contract²⁹. Guidance on timing suggests switching with 21 to 49 days left on the current tariff, so you avoid spending any days on the more expensive rate that follows¹³.

If you do nothing, the outcome is standard across the market. With a fixed rate, you roll onto your provider's standard variable rate when the tariff ends⁸. Suppliers will probably move you to their standard variable tariff, although some may offer you the chance to move to a new one². Once the fixed plan ends you are automatically switched to a more expensive standard variable rate tariff³⁰. Your supplier should remind you when your contract is about to end³, but the reminder is a prompt, not a decision made on your behalf.

One protection is worth naming, because it is a rule rather than a habit. Following the Retail Market Review, at the end of the fixed term customers can no longer be rolled over to another fixed term offer; by default they roll onto the cheapest evergreen tariff of the same type³¹. A supplier cannot silently lock you into a new fixed deal. The default is the variable rate, and the choice returns to you.

Switching homes while on a fixed deal

A fixed tariff is attached to a household's supply at a property, and a move changes the picture in ways that are manageable but not automatic.

The first option is to take the tariff with you. Your supplier might let you keep the same contract and tariff at your new home without charging you a fee³², and if you move your tariff to the new house, exit fees do not apply³³. This preserves the rate you locked and avoids any penalty, but it depends on the supplier operating at the new property and agreeing to the transfer, so it needs to be arranged rather than assumed.

The second option is to end the contract at the old property. If you break your contract, you will automatically go onto a standard variable tariff in your new home³². If you are on a fixed tariff, you might have to pay an exit fee³³, though the usual exception applies: the fee usually does not apply if you have fewer than 50 days left on your contract³³. The practical sequence is to tell the supplier you are moving, ask whether the tariff can transfer, and only then decide whether to end it or carry it.

The third situation is arriving in a home rather than leaving one. New occupants typically inherit the previous occupant's supplier on a deemed, usually variable, rate until they choose their own deal, which is the moment to compare fixed terms rather than sit on the default. Either way, a move is one of the few events that lets a household revisit a fixed deal outside the ordinary switching calendar, and the exit fee rules make the timing worth checking before giving notice.

Fixed tariffs and self-sustaining properties

For a household building energy independence, a fixed tariff is a bridge rather than a destination. Its value is certainty over the price of imports, which is real: at least 12 months of protection from higher prices¹⁸, immune to wholesale cost changes and to price cap movements during the term²⁹. For a home planning a heat pump, a battery or a solar installation, knowing the import price for the next year or two makes the running-cost sums dependable in a way a variable rate never can.

The dependence that remains is equally real. A fixed tariff fixes nothing about where the energy comes from, who supplies it, or what the market will offer next. It binds the household to one supplier's pricing for the term, usually with an exit fee for each fuel to leave early⁶, and it can block the move to time-of-use, tracker or smart-meter tariffs that reward a household for shifting its consumption, the very behaviour a solar-and-battery home is best placed to sell. A household generating its own power may find a fixed flat rate pays it nothing for avoiding imports at peak times, while a time-of-use deal would.

The fit, then, depends on the stage of the journey. A household still importing everything, and wanting predictable costs while it plans its next step, gets genuine value from a fix, especially one with low or no exit fees⁶. A household already generating, storing and shifting may find the flat fixed rate is the wrong instrument, and the smarter position is a shorter fix or a tariff shaped around when it uses energy. Either way, the fixed tariff is best understood as one tool in the kit: it manages the price of dependence, and only the household's own generation and efficiency manage the dependence itself.