Switching to a fixed-rate energy tariff can protect you from price spikes — but the contract you actually sign often contains exit fees, renewal terms, and deemed-contract fallbacks that can cost more than the savings. Before locking in a 12 or 24-month fixed deal, understand how it interacts with Ofgem's price cap, what happens when the fix ends, and whether the variable alternative would leave you better off.
What is a Fixed vs Variable Tariff?
A domestic energy contract in Great Britain is regulated by Ofgem under the Gas Act 1986, the Electricity Act 1989, and supplier licence conditions (Standard Licence Conditions, including SLC 22 on tariff transparency and SLC 23 on contract changes). Fixed tariffs lock in unit rates and standing charges for a set term. Variable (or 'standard variable') tariffs move with wholesale costs but are capped by Ofgem's Default Tariff Cap (Energy Price Cap), reviewed quarterly. Consumers have statutory switching rights and a 14-day cooling-off period under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
Red flags to watch for
Ofgem expects exit fees to be reasonable and reflect actual costs. Anything above ~£50 per fuel on a standard fixed tariff should be questioned and compared against potential savings from switching.
When a fix ends, you're typically moved to the supplier's default variable tariff. Contracts should disclose this and notify you 42-49 days before expiry under SLC 24. Silent rollovers to a premium tariff are a red flag.
Some deals fix only the unit rate and leave the standing charge free to rise. Read the principal terms carefully — the price cap on standing charges applies to default tariffs, not fixed ones.
Off-premises and distance sales (phone, online, doorstep) trigger a 14-day cancellation right under the 2013 Regulations. Absence of this clause is non-compliant.
Some 'fixed' tariffs are actually tracker tariffs with unit rates linked to wholesale indices or CPI. These should be labelled as tracker or variable, not fixed.
Ofgem's SLC 0 (Standards of Conduct) requires fair treatment. Punishing customers for raising queries is incompatible with the licence.
Your legal rights
UK domestic energy customers are protected by: the Gas Act 1986; the Electricity Act 1989; Ofgem's Standard Licence Conditions (including SLC 22, 23, 24 on tariff and contract transparency); the Default Tariff Cap under the Domestic Gas and Electricity (Tariff Cap) Act 2018; the Consumer Rights Act 2015 (fairness of terms in Part 2); and the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013. Enforcement is by Ofgem (regulatory), the CMA (competition), and Trading Standards (consumer protection). Complaints escalate to the Energy Ombudsman after 8 weeks or a deadlock letter. Vulnerable customers have additional protections via the Priority Services Register.
Questions to ask before you sign
- 1What are the exit fees per fuel, and when do they no longer apply (typically last 49 days of the term)?
- 2Does the fix cover both unit rate and standing charge, or only unit rate?
- 3What tariff will I move to at the end of the fix if I do nothing?
- 4When and how will you notify me the fix is ending?
- 5Is this a fixed or a tracker tariff — and if tracker, what index drives changes?
- 6What is the total annual cost at my typical consumption compared to the current price cap?
- 7Is there a 14-day cooling-off period, and how do I exercise it?
- 8Am I eligible for the Warm Home Discount, and does the contract preserve it?
Disclaimer: This guide is for educational purposes only and does not constitute legal advice. Contract law varies by jurisdiction and individual circumstances. Always consult a qualified legal professional before making decisions based on this information.