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UK energy prices have soared, with the average household paying £1,690/year. But with smart switching and the right tariff, you can save £200-400 annually. This guide explains the price cap, fixed vs variable rates, and how to find the cheapest energy deal.
Understanding the Ofgem Price Cap
The Ofgem price cap sets the maximum price suppliers can charge on standard variable tariffs. Current cap: £1,690/year for typical household use (October 2025–March 2026).
- Cap is updated quarterly (January, April, July, October)
- Only applies to standard variable tariffs — fixed rates can be higher or lower
- It's a cap on unit rates, not total bills — high usage households pay more
- Standing charges are also capped (around £0.61/day electric, £0.31/day gas)
Fixed vs Variable Tariffs: Which is Better?
| Feature | Variable Tariff | Fixed Tariff |
|---|---|---|
| Current Price | £1,690/yr (cap level) | Varies — check carefully |
| Price Changes | Every 3 months with cap | Locked for 12-24 months |
| Protection | Price cap protection | None — but locked in |
| Exit Fees | None | £30-50 per fuel |
| Best When | Fixed deals are expensive | Fixed deals are at/below cap |
When to Fix: Only fix if the deal is within £50-100 of the current price cap. If fixed deals are £200+ more expensive, stay on variable and check monthly for better fixed rates.
Typical Savings Available
| Your Situation | Potential Annual Saving |
|---|---|
| Never switched before | £300–400/year |
| Not switched in 2+ years | £200–350/year |
| On expensive fixed deal | £150–250/year |
| Switched within last year | £50–150/year |
Best Energy Comparison Sites
- Uswitch — Compares all suppliers, easy interface, shows actual costs
- MoneySuperMarket — Reliable, includes exit fee calculations
- Compare the Market — Includes exclusive deals not found elsewhere
- Energy Helpline — Whole-market comparison with phone support
Step-by-Step: How to Switch Energy
- 1Find your annual usage — kWh for gas and electricity (on your latest bill)
- 2Compare suppliers — Use a comparison site with your postcode and usage
- 3Check exit fees — If on a fixed tariff, factor in any cancellation charges
- 4Choose your new tariff — Direct Debit gets 3-5% discount over prepayment
- 5Switch online — Takes 5 minutes. New supplier handles the switch, usually 21 days
- 6Final meter reading — Give both suppliers a reading on switching day
Energy-Saving Tips to Reduce Bills
- Smart thermostat: Saves £150-200/year (Nest, Hive, Tado)
- Loft insulation: Saves £150-250/year, often free through government schemes
- Draught proofing: Saves £45-95/year, very cheap DIY fix
- LED bulbs everywhere: Saves £40-75/year
- Shower timer: 4-minute shower vs 8-minute saves £150/year on hot water
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Want more? Visit the Energy Saving Hub
Cut your energy bills — compare suppliers and saving tips.
Sento earns a referral if you click through our links — this never affects our recommendations. Prices and details correct at time of publication. Updated February 2026.