Home energy experts are encouraging homeowners to switch to a fixed tariff in light of the July price cap announcement from Ofgem.
The independent energy regulator announced in May that there will be a 13% increase on the current energy price cap for the period between 1 July and 30 September, which has left many consumers looking for ways to save energy at home to help curb rising costs.
Switching to a fixed tariff now could help protect you from further price cap rises for the length of your contract. Here’s everything you need to know.
Why are energy costs increasing?
If you’re worried about energy bills going up, let’s first explore what the price cap actually means. The price cap refers to a default tariff which is applied to those that are not on a fixed rate tariff, where the price they pay for each unit of energy they use is fixed for the duration of the tariff (usually 12-24 months). The cap is set up the energy regulator Ofgem and is reviewed every three months to reflect wholesale energy prices. The cap sets a maximum rate per unit of energy and the daily standing charge that can be billed to households that are on their supplier’s standard variable tariffs.
If you are on a fixed rate tariff, your bill will not be affected by fluctuations in the energy price cap.
But conflict in the Middle East has caused wholesale energy prices to spike, which is why the energy price cap is set to rise in July.
‘Unit prices are set by Ofgem’s Energy Price Cap quarterly and are determined by what is happening with wholesale prices. The changes impact you if you are on your provider’s standard variable tariff,’ says Kalpana Fitzpatrick, Digital Editor-in-Chief of MoneyWeek.
‘If prices go down, this means you are better off if prices slide, but so far we are not seeing this for 2026. We already know the price cap is up for July, and the next one will come into play in October, and could rise further. But even if we see the price cap fall in October, it is unlikely to dip massively.’
Should you fix your tariff?
Because of the volatility of wholesale energy prices right now, it can be a good idea to consider fixing your tariff.
‘If you’re already on a fixed contract, then the price you pay for your energy is locked in for the length of your contract. It doesn’t always mean that you pay less for your energy, but it does offer stability as you know that the price you pay for the energy you use won’t fluctuate,’ explains Gareth Kloet, energy expert at Go.Compare Energy.
‘Your unit rates won’t move around with quarterly cap changes for the term of your contract, which can make budgeting easier. The main trade-off for this, though, is flexibility: if prices do ease later, you could be paying more than those on a variable tariff for your energy. Most fixed deals come with exit fees, so it’s important to check your contract end date and any charges before switching.’
As Kalpana says, it is unlikely that prices will dip considerably over the coming months, so right now, it is advisable to switch to a fixed tariff if you’re looking to save money at home.
‘The best way to protect yourself is to shift over to a fixed tariff where unit prices are set for a fixed period,’ she says.
‘And to make sure you get the best possible fixed deal, shop around using comparison sites. You may be able to find a fixed rate below the cap or perhaps just slightly more, but you will have locked in a price that gives you security over future price hikes.
‘And if you are not paying by direct debit, you should if you can, as those paying by direct debit are offered cheaper deals.’
If you plan on switching to a fixed tariff, it’s really important that you do your research beforehand.
‘The key thing to do before you commit to a fixed tariff is research: if you’re currently in a fixed tariff and want to move to a different, possibly cheaper tariff, consider any exit fees and whether they will counter any savings. And if you’re going from a variable tariff to a fixed rate tariff, shop around. There are lots of options out there, so consider your energy needs before you commit,’ says Gareth.
‘It’s important to compare the whole tariff, not just the headline rate, as standing charges can make a big difference. This is especially key if you don’t use a lot of energy as they are a fee you pay every day, regardless of how much energy you use.’
Reduce your energy consumption to offset bill rises
While switching to a fixed-price tariff can protect you temporarily from future price rises, it’s still a good idea to cut down on any unnecessary energy usage to keep your bill as low as possible.
Using smart devices and controls can help you reduce energy wastage and help set you up for lower energy bills in the long term, which will help you weather any future price cap volatility.
Tapo
Tapo P110 4-Pack Smart Wi-Fi Plugs- Energy Usage Monitoring
Smart plugs allow you to switch off appliances using your phone or voice. This allows you more control over your energy use. This pack of four is a great starting kit.
Hive
Hive Thermostat Mini
Investing in a smart themometer means you can track your energy useage from your phone. Turn your heating on/off, set schedules and monitor energy trends.
Philips
Philips WiZ A60 B22 Colour Smart Light Bulb – Pack of 2
Another smart way to save energy is to switch to smart bulbs. These bulbs can be controlled from by your phone or voice, and even monitors energy consumption.
If you’re worried about the cost of your energy bills, you should reach out to your energy supplier to see what support they can offer. Alternatively, you speak to an independent body such as Citizens Advice, which can advise you on your options.
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