A fixed deal beats the price cap only if a year of your own use costs less on the deal than at the cap, standing charge included. The unit rate alone doesn't tell you.
The number to beat
At Ofgem's typical use (2,500 kWh of electricity and 9,500 kWh of gas), the cap for 1 October to 31 December 2026 works out at £1,672 a year in East Midlands, the cheapest region, and £1,804 in Merseyside and Northern Wales, the dearest. The Great Britain average is £1,723. That's for Direct Debit and both fuels. Your own figure depends on your region, how you pay and how much you use.
Source: Ofgem energy price cap Cap period from
Why a lower unit rate can cost more
Your yearly cost is the unit rate times your kWh, plus the standing charge times 365 days. A deal can win on one part and lose on the other. Here's an example, with made-up figures set against the typical electricity use:
- A unit rate 1p per kWh lower saves £25 a year on 2,500 kWh.
- A standing charge 10p a day higher costs £36.50 a year.
In this example the deal looks cheaper per kWh and still costs £11.50 more over the year. A home that uses more than 3,650 kWh a year would come out ahead, which is why your own usage matters.
What a fixed deal doesn't change
The cap moves every three months, on 1 January, 1 April, 1 July and 1 October. A fixed deal holds its rates until it ends, so it can be dearer than the cap for part of the term and cheaper for another. Nobody can say in advance which. Look at the exit fee and the length of the deal as well as the yearly total. Guides on fixed and variable tariffs and how the price cap works cover the rest.
Work it out for your home
The energy page takes your postcode, how you pay and your use, and shows what a year costs at the cap. Enter a tariff's rates there to compare it with the cap.
Short answers
How do I know if a fixed deal beats the price cap?
Work out a year of your own use on the deal, with the standing charge added, and compare it with the same year at the cap for your region. The deal is cheaper only if its total is lower, whatever its unit rate looks like.
Is a lower unit rate always cheaper?
No. A lower unit rate can come with a higher standing charge, and the standing charge is paid every day whatever you use. Compare the yearly total at your own use.
What else should I check on a fixed deal?
The exit fee, how long the deal lasts, and what happens to the rates when it ends. The cap changes every three months, but a fixed deal doesn't, so the comparison shifts over the length of the deal.
Sources
Wording checked . Rules change, so check the linked sources before you act.