We all want to feel in control of our household bills, but when it comes to energy tariffs, it can be tricky to know where to start.
Whether you’re trying to keep costs steady, or make the most of lower market prices, understanding how energy tariffs work can help you choose what’s right for your home.
There are different kinds of energy tariffs to choose from, and the best one for you will depend on your budget and your household needs.
What are Energy Tariffs?
Energy tariffs are the plans that set out how much you’ll pay for your gas or electricity. They’re made up of two main parts:
- a unit rate: the cost for each unit (kWh) of energy you use
- a standing charge: a daily fee you pay no matter how much energy you use
Most energy tariffs fall into one of two main categories: fixed or variable energy tariffs.
- Standard variable tariff (SVT): your rate goes up and down as energy prices change
- Fixed tariff: your rate stays the same for the length of your contract
If you haven’t renewed or switched suppliers since your last deal ended, you’re most likely on a standard variable tariff (sometimes called a default tariff). It’s best to contact your supplier or log in to your online account to check whether yours is a fixed or variable energy tariff.
You might also have a dual fuel tariff, where both your gas and electricity come from the same supplier. This can make life easier – one account, one bill – and these energy tariffs can be cheaper. However, they don’t always outweigh the savings you might make by having separate suppliers for gas and electricity.
Fixed vs Standard Variable Energy Tariffs
Fixed Tariff
With fixed tariff energy, the unit rate and standing charges remain constant until your contract ends. That’s usually 12 months, although it can sometimes be longer.
A fixed energy tariff means your prices won’t change, even if the wholesale cost of energy goes up or down. The only way your bill goes up or down is if you use more or less electricity and gas.
Fixed tariff energy works well for people who are worried about prices rising or need to budget, as you’ll know exactly what you’ll pay each month. With fixed tariff gas and electricity, bills won’t rise unexpectedly and you may make savings as energy prices go up, but if energy prices drop during your contract, you won’t benefit from the lower rates. Also, if you want to switch before the end of your fixed tariff contract, you may have to pay an exit fee.
Standard Variable Tariff
A standard variable tariff moves with the market. Standard variable tariff electricity and gas prices may rise or fall every three months in line with Ofgem’s energy price cap reviews – in January, April, July and October.
If the cost of energy rises, your bills will too. If prices drop, you’ll pay less. There’s no contract lock-in, and you’re free to switch at any time without exit fees. Your supplier emails you to let you know if rates change, and whether the daily standing charge and price charged per kWh you’ll see on your next bill will be higher or lower.
Standard variable tariffs can be flexible, but unpredictable, potentially making budgeting and planning harder.
Standard variable tariff electricity prices and gas prices (which can’t go above the Ofgem price cap) can vary, so it’s always worth comparing suppliers.
Understanding the Price Cap
The energy price cap is the maximum amount suppliers can charge per unit of energy and for standing charges if you’re on a standard variable tariff. Based on typical household energy use, it’s designed to give customers fair prices for energy tariffs that reflect the cost of energy.
From 1 January to 31 March 2026, the price cap is £1,758 per year for a typical household using both gas and electricity and paying by Direct Debit – a 0.2% increase from the previous quarter’s £1,755.
The price cap will affect you if you haven’t entered into a specific contract and you pay for your electricity or gas by either:
- Direct Debit
- Standard credit (when you pay after receiving a bill)
- Prepayment meter
- Economy 7 meter
The cap doesn’t limit your total bill – only the rates you’re charged. The more energy you use, the more you’ll still pay. You can find out more about the energy price cap, and what the capped average rates look like for this quarter, here.
Which Tariff Should I Choose?
Choosing between energy tariffs depends on your situation:
Budgeting
For households on tight budgets, fixed tariff gas and electricity offers peace of mind, with predictable bills that help with monthly planning – and avoiding price shocks. Energy prices are still higher than before the energy crisis, so it might be worth getting a fixed rate energy tariff, as some fixed tariffs now offer better value than the price cap.
If you use both gas and electricity in your home, getting both fuels from the same supplier via a dual-fuel tariff can often work out cheaper too.
If you have storage heaters or charge an electric vehicle overnight, time-of-use energy tariffs such as Economy 7 or Economy 10 could work out cheaper.
Market volatility
Energy prices remain unpredictable and even small changes can affect your bills. If market prices are rising and you want to stay protected, it might be worth getting a fixed rate energy tariff. When prices are falling, standard variable tariffs can save you money. It’s worth keeping an eye on market updates or checking comparison sites every few months, especially if you’re coming to the end of a deal.
Remember: When prices rise, it’s important to stay safe – never be tempted to bypass or tamper with your meter to cut costs. If you ever suspect someone of energy theft, report it safely and anonymously to Stay Energy Safe.
If you need help with your energy bills in 2026, you can find out about support schemes, discounts and advice here.
Lifestyle
Your living situation matters, too. Homeowners or long-term tenants might prefer fixed tariff gas and electricity to help with budgeting, especially if they’re managing a mortgage, rent or other household costs.
For renters, the decision might depend on your tenancy length. If you’re renting short-term, a standard variable tariff means you can move or switch without worrying about exit fees.
If your name is on the energy bill and you pay the supplier directly, you can choose and switch suppliers and energy tariffs yourself. If your landlord manages the bills, you’ll have to ask them about switching, as it’s their decision.
You can get in touch with Citizens Advice for guidance about what your landlord can charge you for energy, and learn more from Ofgem about your energy rights as a tenant.
Timing Your Switch
If your fixed deal is ending, use the time before the end date to explore new offers. You won’t pay exit fees, and you’ll have enough time to compare options calmly.
It’s best to use an Ofgem-approved comparison site to see all your choices before deciding.
What to Do When Your Fixed Tariff Ends
Your supplier is legally required to notify you 42–49 days before your fixed tariff ends. During this window, you can switch or renew energy tariffs without an exit fee. If you switch before that window, you may have to pay the exit fee.
If you do nothing when your fixed tariff ends, you’ll automatically move on to your supplier’s standard variable tariff, which is usually more expensive.
When your supplier contacts you, they may offer new deals, but these are only their own options, not necessarily the cheapest on the market. Use an Ofgem-accredited comparison site, like Uswitch, to see if there’s a better deal elsewhere.
Special Tariff Types to Know About
Gas-Only Tariff
A gas-only tariff can be useful if your home doesn’t use electricity from the grid, for example, if you have solar panels and battery storage, or if your electricity is supplied separately such as a communal supply or inclusive with any rent.
Gas unit rates are generally less expensive than electricity rates, so if you heat your home and cook mostly with gas rather than electricity, your bills may be lower. Plus, choosing a gas-only tariff means you have flexibility in terms of choosing different suppliers for each fuel, if your home uses both gas and electricity.
However, dual fuel deals are often cheaper overall, so getting a gas-only tariff could mean you spend more in total.
Time-of-Use Tariffs
These energy tariffs offer cheaper electricity at times when there is less demand for energy on the National Grid. If you use most of your electricity at night – for example, if you charge an EV or have storage heaters – an Economy 7 or Economy 10 tariff could save you money.
- Economy 7 tariffs: give you 7 off-peak hours of energy, usually in one continuous block overnight (for example, 11pm–6am).
- Economy 10 tariffs: give you 10 cheaper hours, sometimes split throughout 24 hours (for example, 1–4pm, 8–10pm, and midnight–5am).
- EV charging tariffs: there are now specific tariffs for EV charging, sometimes linked to smart charging, which can automatically schedule charging at off-peak or lower-cost times, taking account of wholesale costs and demand.
It’s best to check your supplier’s off-peak rate. Also, remember that during peak daytime hours, electricity may be more expensive. You’ll need to be able to shift your energy use into those off-peak windows to benefit from these energy tariffs.
Tracker Tariffs
These energy tariffs are newer options that sit between variable and fixed electricity or gas tariffs, with prices that follow the wholesale energy market.
Tracker tariffs are usually contracted for a fixed term. Some have exit fees, while others don’t. They can be cheaper if you’re prepared to keep an eye on prices so you know how much you’re spending on energy, and can shift your usage to a different time to take advantage of when there are cheaper rates.
However, these energy tariffs are not usually subject to the price cap. Tracker tariff prices can change each day, so if prices are trending down, they provide quicker savings. However, if prices trend up, bills increase more quickly.
Whether you choose a fixed or variable energy tariff, or another tariff type, the key is to understand what you’re signing up for.
Take time to compare your fixed or variable energy tariff options, check your bills, and don’t rush into a new deal just because your supplier suggests it. Reliable advice and official comparison tools are there to help you make the best decision for your home and your wallet.
Understanding energy tariffs can help you manage costs safely and avoid taking unnecessary risks when money feels tight.
If you ever suspect someone is stealing gas or electricity, don’t investigate yourself. Report it anonymously to Stay Energy Safe by filling out the online form or calling 0800 023 2777.
Every report helps make communities safer, prevents tragedies and protects honest customers from paying the price of energy theft.