Is It Worth Getting a Fixed Energy Tariff?

It’s probably safe to say that you’re always looking for ways to save yourself a bit of time and money. Why should you “sacrifice” things you love when there could be a more straightforward approach out there? Getting a fixed energy tariff could be the answer. However, it’s always good to do your research and consider the pros and cons before deciding whether to get one. This is why, in this blog, you’ll find the following:

👉🏻What does it mean to fix your energy tariff?

👉🏻The pros and cons of fixing your energy tariff

👉🏻Is it worth getting a fixed energy tariff?

👉🏻Alternative solutions

What does it mean to fix your energy tariff?

Fixing your tariff – for anything, not just energy – means you’re signing an agreement for a set amount of time to pay a set amount. The length of the tariff typically stems from one year to two years, and in the world of energy, fixing your tariff means you’ve locked in the price for your gas and electricity.

For example, for electricity, your tariff will state how much you’ll be charged per kilowatt hour (kWh). This amount will not change until after the contract has come to an end. If you were to choose a standard variable tariff, however, this amount could change should the wholesale energy market either increase or decrease. Your energy supplier will contact you to inform you of the price rise (or fall) before it comes into effect. If you pay by direct debit, you won’t need to do anything, as the new price will simply be withdrawn from your account. However, if you pay by standing order or other means of payment, you might need to make some changes to your account for the new charge.

The pros and cons of fixing your energy tariff

Although fixing your energy tariff might sound like a no-brainer, as that way you’ll not have an unexpected price rise, there can also be some setbacks. Below, we’ve listed the pros and cons you should consider before taking that step. 

The benefits of fixing your tariff

✅Price certainty. When you fix your tariff, you know exactly how much you’ll be charged for your use, which is perfect for budgeting.

✅Protection against price rises. While you’re still within your fixed contract, your energy supplier cannot increase the price you pay per unit or the standing charge, unless there are changes to the energy market, which will be stated within your agreement.

✅Peace of mind. While everyone else ’s prices might be increasing around you, you can rest easy, knowing you’ve locked yours and you’ll be paying the same amount.

The cons of fixing your energy tariff

👎🏻Stuck in a contract. When you fix your tariff, it’s typically for a set amount of time. Usually, the cheaper the tariff, the longer the contract. This means that should you wish to switch to a completely new supplier later down the line or even to another tariff, it might not be straightforward.

👎🏻Exit fees. As we mentioned above, fixed tariffs typically have hefty exit fees, especially if you want to leave the tariff before the end date.

👎🏻A constant fixed price. Although this is something we’ve listed above as a benefit of a fixed energy tariff, it can also be a downfall. If the wholesale energy market changes and prices decrease, there’s a chance you could end up paying more than you would if you were on a variable tariff.

Is it worth getting a fixed energy tariff?

There’s no set answer for this one. What we will say is consider the Energy Price Cap. A standard tariff’s prices are impacted directly by the Energy Price Cap. As the Price Cap alters every quarter, it’s important to understand how likely it is to change over the whole year. Check out some energy price predictions for more information. If you prefer a degree of certainty and like to budget, a fixed energy tariff could be for you. On the other hand, if you’re happy to be a bit more flexible and want to know that the price you pay is actually reflecting the current market rates, a variable tariff could be the best solution. Here’s a table of the difference between fixed and variable energy tariffs to help you compare them in more detail.
Table comparing fixed and variable energy tariffs

Alternative solutions to getting a fixed energy tariff

You might think you can either fix your energy tariff or choose a variable one, and those are your only two options. However, that’s not necessarily true. Believe it or not, a bill-splitting service like ours (Split The Bills) can be a great alternative solution. We’ll help you and your housemates set up and split all the bills. Plus, you can keep track of your finances with our uncapped energy offering, meaning you’ll have the freedom to responsibly use what you need.

Once you’ve got a quote on our website and have selected your bill package, you can rest assured knowing that you’ll be paying the same amount every month, which will help you to budget better. This means there won’t be any nasty price increases in the winter when you’re likely to use more energy in your home. Have the peace of mind that you’ll stay warm – and your utilities are all sorted through our trusted suppliers.

We don’t just do energy, either! We offer water, broadband, and even an optional TV Licence. You tell us which utilities you want, choose the package that best suits you, and we will do the rest. We’ll contact the suppliers, add your housemates to the account, and set up your bills for you. Once this is done, each month, you’ll all receive your own bill that’s divided equally and paid from your own bank account – eliminating the need for a chief bill payer and those awkward conversations of missed payments.

Take a look at how we work and see if getting a fixed tariff would work for your household!