Before You Fix Your Energy Tariff: What the Small Print Says

Energy Key Facts: Fixing Your Energy Tariff Typical fix lengths: 12, 24 or 36 months Exit fee range: £0 to £75 per fuel Notice of end date: 42 to 49 days required Rollover destination: standard variable tariff Regulator: Ofgem

What a fixed tariff actually fixes

The term "fixed tariff" is commonly misunderstood. It fixes the unit rate paid per kilowatt-hour of gas and electricity consumed. It does not automatically fix the daily standing charge, which is a flat fee paid regardless of consumption. Some fixed tariffs fix both elements; others fix only the unit rate. The contract wording specifies which applies, and suppliers are required to make this clear at the point of sale under Ofgem's supply licence conditions. Fixing also does not mean the bill amount is predictable. A fixed unit rate with variable consumption produces a variable bill. A household that uses more energy in a cold winter will pay more even on a fixed tariff.

The risks most people do not check before fixing

The fixed rate may already exceed the price cap. The Ofgem price cap sets a maximum unit rate and standing charge for default and standard variable tariffs, reviewed quarterly. When wholesale energy prices fall, the price cap rate can drop below the rate on recently signed fixed deals, leaving customers paying more than if they had stayed on a variable tariff. Before fixing, compare the proposed fixed rate against the current and next forecast price cap level. Cornwall Insight and other analysts publish quarterly price cap forecasts. Exit fees trap customers who need to leave early. Most fixed tariffs carry exit fees of between £25 and £75 per fuel. A dual-fuel household leaving a fixed deal early faces charges of up to £150 before any savings calculation. Suppliers are required to waive exit fees within 49 days of a contract end date, but outside that window the fee is contractually enforceable. Auto-rollover is the most common financial trap. Ofgem requires suppliers to notify customers between 42 and 49 days before a fixed deal expires. Customers who do not act within that window are automatically rolled onto the supplier's standard variable tariff, which may be at or above the price cap level. This is legal and widespread. Setting a calendar reminder 50 days before contract end is a practical mitigation. Longer fixes carry more uncertainty. A 12-month fix offers limited exposure if market conditions change; a 36-month fix locks a customer in for a period in which wholesale prices, the price cap trajectory and personal circumstances may all change materially. The exit fee cost-benefit calculation changes significantly on longer contracts.

What the small print usually says

Fixed tariff contracts typically contain clauses covering the unit rate and standing charge terms, the exit fee structure, the notification period before contract end, the rollover destination tariff, and the process for smart meter data sharing. Some contracts include a price protection clause that allows the supplier to pass through increases in non-commodity costs such as network charges and levies even during a fixed period. This is legal under Ofgem rules and is disclosed in the contract terms, but it is frequently overlooked by customers who assume "fixed" means fully insulated from increases. Green fixed tariffs warrant particular scrutiny. The definition of what constitutes a green tariff is not standardised. Renewable Energy Guarantee of Origin certificates are the most common mechanism, but the volume and vintage of those certificates varies between suppliers. A tariff marketed as 100% renewable may be backed by certificates purchased on the open market rather than generation directly linked to the supply.

Who fixing works for and who it does not

Fixing makes financial sense when the fixed unit rate is materially below the forecast price cap for the same period, when a household has predictable consumption and wants billing certainty, or when wholesale market signals suggest prices are likely to rise during the contract period. Fixing is less suitable for customers who may need to move property during the contract term, households with highly variable consumption patterns, customers whose financial position may require switching to a cheaper product mid-contract, and customers whose current standard variable tariff is already at or below the proposed fixed rate.

What to verify before you proceed

Before signing a fixed tariff, confirm in writing: whether the standing charge is fixed or variable during the contract, the exact exit fee per fuel and the conditions under which it is waived, the contract end date and the automatic rollover destination, and whether the fixed rate is above or below the current Ofgem price cap equivalent rate. Compare the proposed fixed rate against the current price cap unit rate published on Ofgem's website and against publicly available forecasts for the next one to two price cap periods. If the fixed rate is within 5% of the forecast cap rate, the certainty benefit is marginal and the exit fee risk may outweigh it.

Where to complain if something goes wrong

If a supplier misrepresents tariff terms at point of sale, fails to notify of contract end within the required window, or applies an exit fee incorrectly, the escalation path is a formal written complaint to the supplier followed by the Energy Ombudsman if unresolved within eight weeks. The Ombudsman can direct tariff correction, credit application and compensation for demonstrable loss.

Disclaimer This article is for information only and does not constitute regulated energy or financial advice. Tariff rates, exit fees and price cap levels change frequently. Always verify current terms directly with your supplier before signing any fixed tariff agreement. Kael Tripton Ltd is an independent editorial publisher and is not regulated by Ofgem or the FCA.

Frequently asked questions

Is a fixed tariff always cheaper than a variable one?

Not necessarily. When the Ofgem price cap falls, customers on fixed tariffs signed at higher rates pay more than those on variable tariffs. The relationship between fixed rates and the price cap changes with wholesale market conditions.

Can a supplier increase my fixed tariff rate during the contract?

The unit rate and any fixed standing charge cannot be increased during the contract period. However, some contracts allow pass-through of specific regulated costs such as network charges. The contract terms specify which costs are fully fixed.

What happens if my supplier goes bust during my fixed contract?

Ofgem's Supplier of Last Resort process assigns customers to a new supplier. The new supplier is not obliged to honour the original fixed rate, and customers are typically placed on a standard variable tariff pending a new choice.

Do exit fees apply if I switch at the end of my fixed term?

No. Ofgem rules require suppliers to waive exit fees during the 49-day window before contract end. Switching initiated within this window incurs no exit penalty.

How do I know when my fixed deal ends?

Suppliers are required to notify customers between 42 and 49 days before a fixed deal expires. The end date is also stated in the original contract documentation and is typically visible in the online account.

Sources Ofgem: Energy Price Cap Explained Ofgem: Energy Contracts Guide Energy Ombudsman: Dispute Resolution