Fixed-Rate Energy Contracts: Energy rates locking in savings that surpass the cost ceiling
In the current economic climate, energy costs remain high and volatile, leading to uncertainty for many households. However, a recent 7% decrease in the energy price cap has opened up opportunities for significant savings and bill stability by switching to a fixed energy tariff.
As of July 2025, the energy price cap for a typical dual-fuel household has been lowered to £1,720 annually. Interestingly, some fixed tariffs are available that are cheaper than even the new price cap, offering potential savings compared to both variable tariffs and the capped rates.
Fixed deals provide price certainty for 12 months or more, shielding customers from any future price rises during the contract term and ensuring predictable monthly payments. Recent market analysis shows that fixed deals could save households up to £334 compared to current price cap levels, and around £205 compared to the new reduced cap.
About 19 million UK energy accounts were on fixed deals as of April 2025, reflecting a strong trend towards fixing to avoid volatility. However, it's essential to consider that fixed tariffs don't benefit from any further price cap reductions while you are in the contract. If you expect prices to fall further later in the year, staying variable might offer more flexibility.
Additionally, some fixed deals may include exit fees if you switch before the contract ends. It's also important to note that switching is not available to all customers, such as those with supplier debts or specific meter types.
In summary, given the recent 7% price cap decrease and the availability of fixed deals costing less than the cap, switching to a fixed energy tariff now can provide significant savings and bill stability over the coming year, especially if you currently pay variable or out-of-contract rates. It is advisable to use an independent energy comparison service to find the best fixed deal suited to your usage and preferences.
Moreover, switching energy providers can help the environment, especially if moving to a green deal offering renewable electricity and more environmentally-friendly gas. For instance, Ecotricity's EcoFixed - 1 Year Green Tariff is the cheapest energy deal this week, with an average annual bill of £1,545.
It's worth mentioning that the energy market is easily influenced by international events and political tensions that can't be forecast. Despite predictions suggesting a slight decrease in the price cap in October to £1,698, providers like EDF and British Gas are predicting a smaller decrease, and their confidence in these forecasts is low.
With fixed energy tariffs returning to the market, it's advisable to compare energy providers to make savings. Outfox the Market offers several competitive fixed deals, with their 2-year Fix'd Dual Jul25 v1.0 having an average annual bill of £1,550.
In conclusion, in the face of ongoing energy price volatility, switching to a fixed energy tariff can offer UK households significant savings, bill stability, and environmental benefits. It's essential to weigh the pros and cons and make an informed decision based on your individual circumstances and energy usage.
In the face of ongoing energy price volatility, switching to a fixed energy tariff can provide significant savings for households, as some fixed tariffs are now cheaper than the lowered annual energy price cap and could save up to £334 compared to current price cap levels. It is important to consider that fixed tariffs might not benefit from any further reductions in the price cap during the contract period, and it's crucial to use an independent energy comparison service to find the best deal that suits your preferences and usage. Additionally, opting for a green energy deal not only contributes to the environment but can also potentially lower your energy bills, such as Ecotricity's EcoFixed - 1 Year Green Tariff, which has an average annual bill of £1,545.
