The price cap will rise by £63 in October, the third increase this year. For a typical dual-fuel household on standard variable tariffs, that means annual bills of £1,717, according to Ofgem’s latest announcement. The question every homeowner now faces: fix or float?
Rest Less ran the numbers on exactly this dilemma last week, as reported by Rest Less, and the answer isn’t straightforward. The cheapest fixes on the market are currently around 10–15% above the cap, roughly £1,900–£2,000 for typical usage. You pay a premium for predictability. But if wholesale prices spike again this winter, that premium could look cheap by February.
Who qualifies, and who doesn’t
Fixed tariffs are available to any household with a smart meter or standard meter, but not all homes qualify for the best rates. Suppliers reserve their lowest fixes for customers who pay by direct debit and have smart meters. Pay-as-you-go and prepayment customers face higher fixed offers, typically 5–8% more. If you’re still on a standard variable tariff and haven’t switched in two years, you’re almost certainly overpaying, the average ‘loyalty penalty’ is £140 a year, Citizens Advice reported in July.
What it costs a typical 3-bed semi
Take a 3-bed semi using 12,000 kWh of gas and 2,900 kWh of electricity. On the October cap, that’s £1,717. On the cheapest fix today, it’s roughly £1,920, a £203 premium. If the cap rises again in January (analysts at Cornwall Insight predict another 3–5% increase), the fix might break even by spring. But if wholesale prices fall, you’re locked in. The catch: no one can predict wholesale gas markets six months out. The Energy Saving Trust advises that fixing only makes sense if you value certainty more than the chance of a lower bill.
Heat pumps and solar change the maths
For homes with heat pumps or solar PV, the calculation flips. A heat pump household using 6,000 kWh of electricity (no gas) pays roughly £1,030 on the cap. The cheapest fix would be about £1,180, a £150 premium. But because the heat pump uses less total energy, the absolute saving from fixing is smaller. Solar households with net-zero grid imports see almost no benefit from fixing, since their bill is mostly standing charges. For these homes, the real lever is not tariff choice but fabric efficiency: insulation, draught-proofing, and window upgrades cut consumption permanently, regardless of what the cap does.
What the cap doesn’t cover
The cap applies to unit rates and standing charges, not to your total bill. If you use more energy, say, because your home is draughty or you have an old G-rated boiler, you’ll pay more regardless of tariff. The EPC rating matters here. A D-rated home uses roughly 30% more energy than a C-rated one for the same comfort level. Fixing a tariff on a leaky home is like putting a new engine in a car with a hole in the fuel tank. The smarter move: spend the £203 premium on loft insulation (typical cost £300–£400, payback 2–3 years) and stay on the variable tariff.
Households on standard variable tariffs can compare fixes via Ofgem’s certified comparison sites from today. The window for the best rates may close if wholesale prices rise further. But for most homes, the real prize isn’t a fixed rate, it’s lower consumption. Insulate first, then decide.
Frequently Asked Questions
Generally no. Heat pump homes use less total energy, so the absolute saving from a fixed tariff is smaller. The premium for fixing is typically £150–£200, and you're unlikely to recoup that unless the cap rises sharply. Focus on improving your home's fabric efficiency instead.
You stay on the fixed rate until the contract ends, usually 12 or 24 months. If the cap falls below your fixed rate, you'll pay more than variable customers. Some suppliers allow early exit with a fee (typically £30–£75 per fuel), but it's rarely worth it unless the cap drops by more than 10%.
