Fixed vs variable energy tariffs in the UK: what is the difference?

Choosing between a fixed and variable energy tariff is one of the most common decisions UK households face. This article explains the ideas in plain language—similar to how a Doorstep Savings helper would talk it through on your doorstep.

What is a variable tariff?

On a variable tariff, the unit rate (pence per kWh) and often the standing charge (pence per day) can go up or down when your supplier or the market changes. Some variable tariffs track regulatory price cap levels or supplier default offerings.

Pros (in principle):

• If wholesale prices fall, you might benefit without re-contracting (depending on supplier rules).
• Sometimes simpler to exit than a long fix (still check terms).

Cons:

• Less predictable bills when rates rise.
• You need to stay engaged when your situation or prices move.

What is a fixed tariff?

A fixed tariff usually locks your unit rates and standing charges for an agreed period—often 12 months, sometimes longer. You are still billed for what you use; the per kWh and daily standing numbers stay fixed until the fix ends (unless the contract says otherwise).

Pros:

• Predictability for budgeting while the fix lasts.
• Protection from short-term increases in those published rates.

Cons:

• If market prices fall sharply, you might not benefit until your fix ends (unless your deal allows changes or you pay exit fees to leave).
• Early exit fees may apply if you switch away early—always check.

Standing charges: the line item people miss

Almost all domestic tariffs include a standing charge—a fixed daily cost before you have used any energy. Two deals with similar unit rates can still feel different in total if standing charges diverge.

When comparing:

• Look at pence per kWh for gas and electricity
• Look at pence per day standing for each fuel
• Consider your annual usage (kWh) if you have it from a bill

Dual fuel vs single fuel

Dual fuel means gas and electricity with one supplier on one account. Single fuel means you split suppliers or fuels. Dual fuel is not automatically cheaper—it is a convenience and pricing question. Compare total annual cost (or monthly direct debit estimates) on a like-for-like usage basis where possible.

What the energy price cap is (and is not)

The Ofgem price cap applies to certain default and standard variable tariffs—not to all deals on the market. It sets a ceiling on unit rates and standing charges for those tariffs, updated periodically. A competitive fixed deal may be above or below what you would pay on a capped variable product depending on the period—there is no universal “always pick fixed” rule.

Before you switch

1. Note your contract end date and any exit fees
2. Gather a recent bill or annual usage (kWh)
3. Check meter type (traditional, smart, prepay)—some switches need extra steps
4. Read the summary of the new tariff, not just the headline price

How Doorstep Savings helps

Our helpers focus on clarity: what the numbers mean, what changes on switch day, and what you are committing to. We are happy to sit with your bill and talk it through—get in touch.

Related reading

• Standing charges explained
• Smart meters and switching