It’s important to consider the pros and cons of different tariff types when choosing your energy plan. Read on to find out more about the differences between fixed and flexible tariff types so you can make up your mind about what’s best for you.

What’s a fixed tariff?

With a fixed energy tariff, you lock down your energy prices for the duration of your plan. However, this doesn’t mean that you pay the same amount each month. It means that the price per unit of your energy won’t change. So the more units of energy you use, the more you pay.

What’s a flexible tariff?

A flexible tariff is also known as a variable tariff. This means that the price per unit of energy that you pay changes depending on the wholesale price of gas and electricity. However, your energy supplier will usually live you 30 days notice before prices rise, so that you can budget accordingly. You can switch over to a fixed tariff at any point if you want some more security.

What’s a unit rate?

Before deciding upon the type of tariff that is best for you, you should probably know what a unit rate is. Energy is measured in Kilowatt hours (kWh). This essentially translates to the price of one kilowatt of energy being used for an hour. The wholesale price of energy affects the cost of your tariff, so the real price of each kWh is constantly changing.

Pros and cons of fixed tariffs

Benefits of fixed tariffs

  • They are usually cheaper than variable tariffs. This is because you aren’t subject to price fluctuations of wholesale prices.
  • You can budget your monthly spending by knowing how much you are likely to spend each month on your energy.
  • If you know energy prices are low at any particular time, you can sign up to a fixed tariff and ensure that the price per unit that you pay remains low.

Drawbacks of fixed tariffs

  • If the unit price of energy drops, then you don’t get to reap the benefits as you are locked into your tariff.
  • You need to ensure that you sign up to a new energy plan before the end of your fixed energy tariff. This is because if you don’t have a new plan ready, you will be automatically put on a variable energy tariff until you choose your next plan, and this is typically an expensive route.
  • If you decide you want to back out of your fixed energy plan before your contract ends, you can face pretty hefty exit fees. This can be any price up to £50.

Pros and cons of flexible tariffs

Benefits of flexible tariffs

  • There are no exit fees with variable tariffs! This means that you can switch over to a new energy plan at any point and not face hefty fees.
  • If the cost of wholesale energy drops, your energy bill will also drop, allowing you to make some savings.

Drawbacks of flexible tariffs

  • If there are increases in prices, your supplier will pass on these changes to you.
  • If you know that energy prices are about to increase, you might want to switch over to a different type of tariffs to protect you from these changes. This requires a lot of effort from you!

What’s a capped tariff?

The best of both worlds! A capped tariff is a variable tariff, but includes a maximum price that your energy bill can increase to. You can reap the benefits of your energy prices dropping, however you won’t have to worry about major price increases.

So, which is best for you?

The most important factor to consider when choosing the best tariff for you is your financial situation. If you require financial stability, a fixed tariff is probably the best option for you. This is because you can budget accordingly and not be subjected to price increases. Also, fixed tariffs tend to be a lot cheaper than flexible tariffs. If you aren’t sure which tariff is best for you yet, you can always opt for a variable tariff. At first, variable tariffs are the cheapest option, and they tend to rise. So opting for a variable tariff and then switching over to a fixed energy plan is a relatively cheap option if it’s not your long-term plan.

Aside from the financial factors to bear in mind, make sure to consider all of the pros and cons listed above before you decide upon the best energy tariff for you. You can head over to and compare all the energy tariffs on the market.


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