Fixed vs Variable: Which Energy Tariff Should You Pick for Winter 2025?

TL;DR – The July price‑cap sets the typical bill at £1,720/yr, but December forward contracts are already 14 % higher. Lock in a 12‑month fix below 19 p/kWh electricity & 6 p/kWh gas now, or stay variable only if you can absorb a potential January spike. Scroll to Pros & Cons for a quick decision tree.

Contents

1. Why this guide matters

2. How Ofgem’s price‑cap actually works

3. Fixed tariffs – pros, cons & today’s cheapest rates

4. Variable tariffs – who should stay put?

5. Time‑of‑use & tracker deals

6. 6 classic mistakes to avoid

7. FAQs

8. Next steps & checklist

1 – Why This Guide Matters

Searches for “…should I fix my energy?” spike every autumn. Last year, 63 % of households who waited ended up paying on average £128 more than those who fixed in August (Switch Squid analysis of 72k switches). With wholesale gas creeping up again and the BoE forecasting a colder‑than‑average Q4, deciding now could save £200‑plus.

(Hero image suggestion: infographic showing fixed vs variable price lines from 2022‑2025 with today’s price‑cap marker)

2 – How the Ofgem Price‑Cap Works (in Plain English)

Key number: £1,720/yr (for a dual‑fuel Direct‑Debit household using 2,700 kWh electricity & 11,500 kWh gas).

The price‑cap isn’t a maximum bill. It limits unit rates & standing charges. Your bill = units × usage. So a high‑usage family on the cap can still pay £3k. Table 1 breaks down the Q3 2025 cap vs Q3 2024:

Standing charges keep nudging up, so cutting kWh via efficiency or a cheaper unit fix still wins.

3 – Fixed Tariffs: Pros, Cons & Today’s Cheapest Rates

Pros

• Budget certainty for 12–24 months.

• Shield against winter wholesale spikes.

• Some fixes have £0 exit fees (So Energy, E.ON Next) – bail if prices fall.

Cons

• Pay a risk premium if the market drops.

• Switching mid‑fix may cost exit fees (£75–£150) on legacy suppliers.

Today’s top fixes (19 July 2025)

• Octopus 12‑m Fix – 18.5 p/kWh elec, 5.9 p/kWh gas, £0 exit.

• OVO 24‑m Fix – 19 p/6.1 p, £75 exit.

• EDF TrackerFix – 20 p/6.4 p, tracks down – never up.

Compare live fixes in 3 minutes →

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4 – Variable Tariffs: Who Should Stay Put?

Stay on the cap only if:

1. You can afford a potential 10‑15 % jump in January.

2. You’re on a prepay meter waiting for smart‑meter upgrade.

3. You have solar + battery exporting > 2,000 kWh/yr at SEG ≥24 p/kWh.

Otherwise, fixed beats variable 8 times out of 10.

5 – Time‑of‑Use (TOU) & Tracker Deals

TOU tariffs like Octopus Agile pay you to use power < 5 p/kWh at 2 a.m. Perfect if you have:

• EV charging 15 kWh/night.

• Heat‑pump with thermal store.

• Dishwasher/washing machine delay start.

Tracker deals follow wholesale day‑ahead market. Risky if Russia/Ukraine flares, but Agile users saved 12 % vs cap last winter.

6 – Six Classic Switching Mistakes

1. Ignoring exit fees – always weigh fee vs projected saving.

2. Wrong kWh data – estimate too low and you mis‑rank tariffs.

3. Forgetting standing charge creep – pick tariff by total cost, not unit only.

4. “Wait & see” paralysis – historic wholesale price charts show August is the sweet spot.

5. Not checking SEG rates if you have PV.

6. Missing cashback offers – some suppliers give £100 sign‑up credit.

7 – FAQs

Will the January 2026 cap rise?

Cornwall Insight forecasts +7 % (to £1,841). That still sits above today’s best fixes.

Can I switch if I’m in debt to my supplier?

Yes, as long as debt < £500 (Ofgem rules). The balance just follows you.

Does a smart meter matter?

Not to switch, but mandatory for most TOU deals.

8 – Next Steps & Checklist

Tip: Fix + two DIY tweaks = £300–plus back in your pocket.

Compare & switch now →