Is a fixed energy tariff worth it?

On a fixed tariff, the price you pay per unit of energy (kWh) and the daily standing charge stay the same for the length of the deal, often one or two years. Your bill can still go up or down, because it depends on how much energy you use.

On a standard variable tariff, your supplier can change the unit rates and standing charge, within the limits of the Ofgem price cap. If you've never switched, or your fixed deal ended and you didn't choose a new one, you're probably on a standard variable tariff.

The Ofgem energy price cap limits the unit rates and standing charges that suppliers can charge customers on standard variable tariffs. Ofgem reviews it every quarter, so variable rates can change several times a year.

The cap limits rates, not your total bill, so a household that uses more energy still pays more. Fixed tariffs aren't covered by the cap: they can be priced above or below it. Comparing a fix's unit rates and standing charge with the current capped rates is a useful starting point.

Many fixed tariffs charge an exit fee if you leave before the end of the deal, often per fuel. Check the amount before you sign up, as it affects how flexible the deal is if prices fall or you move home.

Suppliers can't charge exit fees if you switch in the final 49 days of a fixed tariff, so you can line up a new deal before the old one ends. Your supplier should contact you before your fix ends. If you don't choose anything, you'll usually move onto its standard variable tariff rather than losing supply.

There's no right answer for everyone. Things that may point one way or the other include:

• A fix may suit you if you want predictable rates for budgeting and the fixed rates are close to or below the capped rates
• A variable tariff may suit you if you want to be able to leave without exit fees or expect capped rates to fall
• If you're moving home soon, check whether the fixed deal can move with you or whether an exit fee would apply
• If you have a smart meter, an electric car or solar PV, a time-of-use or export tariff may be worth comparing as well
• Some suppliers also offer tracker tariffs that follow wholesale prices more closely, which carry more price movement

Switching supplier doesn't change your gas or electricity supply, pipes or wires — only who bills you. Take a meter reading on the day you switch so your final bill from the old supplier is accurate. If you owe your current supplier money, you may need to clear the debt before you can switch.

If a supplier goes out of business, Ofgem moves its customers to a new supplier and your supply continues. Any credit balance you had with the failed supplier is protected.