Comparison · Energy · 2026
Fixed vs Variable Energy Tariff 2026: Which Should You Pick?
Choosing an energy tariff in 2026/27 comes down to a simple trade-off: certainty versus flexibility. A fixed tariff locks your unit rates and standing charges for the term, so your prices cannot rise. A variable tariff tracks the Ofgem price cap, which is reviewed every quarter, so your bill can go up or down. This comparison explains how each works, where exit fees bite, and how to decide based on how fixed deals compare with the current cap.
TL;DR - 30-Second Summary
- - Fixed: locked rates for the term, certainty, but possible exit fees
- - Variable: tracks the Ofgem price cap, flexible, no exit fees
- - Decision rule: fix if a deal is at or below the current cap
- - Check the current cap - it is reviewed every quarter
Side by Side
| Feature | Fixed Tariff | Variable Tariff |
|---|---|---|
| Unit rates | Locked for the term | Follow the price cap |
| Price changes | None during term | Reviewed quarterly |
| Budgeting certainty | High | Lower |
| Exit fees | Often yes | No |
| Benefit if prices fall | No, you stay locked | Yes, cap drops |
| Risk if prices rise | Protected | Exposed |
| Flexibility to switch | Limited by exit fees | Switch anytime |
Unit prices and the cap are illustrative and change quarterly. Check the current Ofgem price cap for your area.
Worked Example: Comparing a Fix to the Cap
The simplest way to judge a fixed deal is to compare its annual cost for your usage against the current price cap. As an illustration, suppose the cap for a typical household sits around £1,641 a year for the quarter and you are offered two fixed deals. Remember this is illustrative; you must check the live cap when you decide.
| Option | Annual cost vs cap | Verdict |
|---|---|---|
| Fix priced below the cap | Cheaper than variable now | Strong case to fix |
| Fix priced around the cap | Similar to variable now | Fix only for certainty |
| Fix priced above the cap | More than variable now | Usually stay variable |
A fix below the cap protects you and saves money straight away, which is the clearest signal to lock in. A fix above the cap only makes sense if you are confident prices will rise sharply. Estimate your usage with the energy bill calculator.
The Role of Exit Fees
Exit fees are the hidden catch with fixed deals. If you lock in and prices then fall, an exit fee can stop you switching to a cheaper tariff without losing money. The best fixed deals carry no exit fees, giving you the certainty of fixed rates plus the freedom to leave if a better offer appears. Where exit fees are high, you are effectively betting that prices will rise during your term, so weigh that bet carefully.
On a variable tariff there are no exit fees, so you keep the option to fix later if the outlook changes. That flexibility has real value when prices are hard to predict.
Who Should Choose What
- - A deal is at or below the current cap
- - You want predictable monthly budgeting
- - Exit fees are low or zero
- - You think wholesale prices will rise
- - Fixed deals are above the cap
- - You expect prices to fall
- - You want freedom to switch anytime
- - You prefer not to commit to a term
Verdict
There is no universally right answer, because it depends on how fixed prices compare with the Ofgem cap at the moment you choose. The clean rule is this: if you can find a fixed deal priced at or below the current cap, ideally with low exit fees, fixing gives you both certainty and value. If fixed deals are clearly above the cap, or you expect the cap to fall, staying on the variable tariff keeps your costs in line with the market and lets you switch freely. Whatever you pick, check the current cap before deciding, since it changes every quarter.