Choosing a tariff is not simply a choice between “safe” and “cheap”. A fixed tariff offers agreed rates for a period; a standard variable tariff can change. The right comparison depends on your usage, the full price and the terms you are willing to accept.
What “fixed” and “variable” mean
A fixed tariff usually fixes specified unit rates and standing charges for a set term. Your total bill is not fixed: using more or less energy changes what you pay. Check which elements are fixed, the end date and whether an exit fee applies if you leave early.
A standard variable tariff (SVT) can have rates that change over time. In Great Britain, Ofgem’s price cap limits certain unit rates and standing charges on eligible default tariffs. It is not a cap on your total bill, and regional rates and payment methods matter. Northern Ireland has separate arrangements.
Compare using your own usage
Find annual electricity and gas use in kWh on a bill or in your supplier’s app. For each fuel, compare:
- Unit rate: the price for each kWh used.
- Standing charge: the daily charge for having the supply, even when you use little energy.
- Payment and meter terms: Direct Debit, standard credit or prepayment, and any time-of-use meter requirements.
- Contract terms: end date, exit fees, smart-meter conditions and any other eligibility rules.
An annual estimate can be calculated as annual kWh multiplied by the unit rate, plus 365 times the daily standing charge. Do the calculation separately for electricity and gas, and use comparable VAT-inclusive prices.
Questions to ask before switching
Ask whether the offer is available for your address and meter, what happens when the fixed period ends, and when an exit fee can apply. Compare the cost over the relevant term, not just a monthly Direct Debit: payments may be smoothed or based on a forecast rather than actual monthly use.
No tariff is automatically best for every household. A fixed price may suit someone who values known rates, while a variable tariff may avoid a fixed-term commitment. Check current official guidance and the supplier’s written terms before deciding.