Millions of UK households face an £87 annual increase in energy bills starting this April, as Ofgem‘s Energy Price Cap rises yet again. With the cost-of-living crisis deepening, the question is no longer if prices will climb, but whether families can act quickly enough to limit the damage. Experts are urging households to reconsider how they approach their energy costs, with one bold suggestion: fix your energy tariff now.
The Problem With Variable Tariffs
Currently, 80% of UK households rely on variable energy tariffs. These tariffs, tied to the Energy Price Cap, shift every three months, leaving customers exposed to market fluctuations. As MSE explains:
“The most important thing to understand is that price-capped tariffs are variable, and the prices change every three months in line with the cap.”
While variable tariffs may feel familiar, they offer no stability. With prices set to remain high throughout 2025, many households could end up paying more than they need to.
Is Fixing the Answer?
Fixing your energy tariff can provide certainty and stability, shielding households from impending price hikes. MSE suggests that a fixed deal “up to 2% more than the current (Jan to Mar) price cap” could deliver savings over the next year.
But the decision isn’t without its risks. If energy prices fall, those locked into fixed tariffs may pay above-market rates. Yet, predictions indicate that bills will remain elevated, making fixing a safer bet for the majority.
Key Considerations Before Fixing
- Stability vs. Risk: Fixed tariffs offer predictable payments, but may result in higher costs if prices drop.
- Speed: Fixed deals are often withdrawn as markets shift—act fast if you find a competitive rate.
- Market Predictions: Current data suggests prices are unlikely to fall significantly in 2025.
Comparison: Variable vs. Fixed Tariffs
| Tariff Type | Advantages | Disadvantages |
|---|---|---|
| Variable (Price Cap) | Flexible, adjusts to market drops | Exposed to price hikes every 3 months |
| Fixed | Stability, protection from future rises | Potentially higher if prices fall |
The Argument for Action
This isn’t just about managing bills; it’s about rejecting passive acceptance of rising costs. The conventional wisdom of sticking with the default variable tariff ignores the volatility families now face. Fixing your tariff might not guarantee immediate savings, but it offers clarity—a rare commodity in the chaos of today’s energy market.
Households have a choice: wait and hope for falling prices, or take control by locking in a deal that limits future uncertainty. It’s a question of whether we continue to ride the wave of market unpredictability or chart our own course through turbulent waters.
