Most energy tariffs are one of three kinds: fixed, variable or tracker. The difference is how often your rates can change, and who carries the risk when wholesale prices move.
Fixed
Your unit rates and standing charges stay the same for a set term, often 12 or 24 months. Your bill still goes up and down with how much you use, but the price per unit doesn't.
Fixed deals often have an exit fee if you leave early. It's usually charged per fuel, so leaving a dual fuel deal can mean paying it twice. Suppliers can't charge it in the last 49 days of a fixed deal, so you can always switch near the end without paying.
Variable
A standard variable tariff can change, and its rates are limited by the Ofgem price cap, which is updated every three months. It's what you move onto if a fixed deal ends and you don't choose another. There's normally no exit fee.
Tracker
A tracker follows wholesale prices closely, sometimes changing every day. It can be cheaper when wholesale prices are low, and more expensive when they rise. Some trackers have a maximum price. Read the terms before you sign up.
Which suits you?
- Fix if you want to know your rates for a year or two, and the fixed rates are close to or below the cap.
- Stay variable if fixed deals cost noticeably more than the cap, or you might move home soon.
- Consider a tracker if you can live with prices changing and can move some use to cheaper times.
Before you fix
- Compare the yearly cost at your own usage, not just the unit rate. A low unit rate with a high standing charge can cost more.
- Check the exit fee and whether it's per fuel.
- Note the end date, so you can compare again before it rolls onto a variable rate.
Sources
Wording checked . Rules change, so check the linked sources before you act.