Fixed Tariffs Offer Savings as Price Cap Rises
Households that fail to switch to a fixed energy tariff could face an additional £221 on their annual bills, according to new analysis from Uswitch. The warning comes ahead of the January price cap increase, which will push typical bills higher for those on standard variable tariffs.
Uswitch found that the cheapest fixed deals are currently around £221 less than the price cap level set for January. This means that customers who remain on default tariffs could be paying hundreds more than necessary.
Comparison of Fixed vs Variable Tariffs
The analysis compared the average price cap from January to March 2025 with the best available fixed deals. For a typical household using 2,900 kWh of electricity and 12,000 kWh of gas, the price cap will be about £1,736 per year. In contrast, the cheapest fixed tariff is around £1,515, a saving of £221.
Uswitch's Richard Neudegg said: “With the price cap rising in January, it's more important than ever for households to consider switching to a fixed deal. The savings available are significant, and locking in a rate now could protect against further price increases.”
Energy Market Volatility
The energy market remains volatile, with global wholesale prices affecting UK bills. Ofgem's price cap, which limits how much suppliers can charge per unit of energy, is set to rise by 1.2% in January. While this increase is modest, the gap between the cap and fixed deals has widened.
Neudegg added: “Fixed tariffs offer certainty and often better value. However, we advise customers to check the terms, including exit fees, before switching.”
How to Switch and Save
Switching is straightforward and can be done online or via phone. Customers should compare deals using accredited comparison sites. The process typically takes 21 days, and there is no interruption to supply.
Uswitch recommends that households review their energy tariff at least once a year. Those on prepayment meters or with debt may have fewer options but can still benefit from switching to a fixed deal offered by their current supplier.
According to Uswitch, around 11 million households are on standard variable tariffs, missing out on potential savings. The company urges consumers to act before the January price cap rise takes effect.
