Energy prices remain one of the biggest household bills in 2026. The typical default tariff sits around £1,700 a year under the Ofgem price cap, but the best fixed deals are now priced below the cap again — meaning most households can save £200-£400 a year simply by switching. This guide explains what’s changed, what to compare, and how to switch without getting caught out.
Current Market Overview
| Factor | 2026 Situation |
|---|---|
| Price cap (typical use) | ~£1,700/year |
| Fixed deals | Available below cap |
| Cheapest fix | ~£1,500-1,600/year |
| Best variable | ~£1,600-1,700/year |
Fixed deals are once again cheaper than the price cap, making switching worthwhile. That has not always been the case. Between late 2021 and 2023, no fixed deal could beat the cap and switching all but died out. Since the wholesale market stabilised, suppliers have started competing for customers again, and 12-month fixes below £1,600 are common across most regions.
How the Price Cap Works
The Ofgem price cap applies to default (variable) tariffs. It caps the maximum unit rate (p/kWh) and daily standing charge for each region, and it is reviewed every three months — January, April, July and October. The headline “£1,700” figure is the bill for a typical household using 2,700 kWh of electricity and 11,500 kWh of gas a year, not a total cap on what you pay. Use more energy and you will pay more, whatever the cap says.
Two points matter here:
- The cap is a safety limit, not a recommendation. Staying on it means paying the most you can be charged.
- The cap moves quarterly. A 12-month fix below today’s cap locks in your rate and protects you from January’s rise, even if it ends up being smaller than expected.
Fixed vs Variable
| Type | Pros | Cons |
|---|---|---|
| Fixed 12 months | Price certainty, currently below cap | Exit fees (typically £25-£75 per fuel) |
| Variable (SVT) | No exit fees, flexible | Can rise at each cap review |
Worked example: On the price cap, a typical household pays around £1,700 a year. A standard fix at £1,600 saves roughly £100 in year one; a top-rate fix at £1,500 saves about £200. Add a smart meter and shift washing, EV charging or heating onto an off-peak tariff, and total savings push past £300-£400 a year — matching the range quoted above.
Comparison Sites
| Site | Features |
|---|---|
| Uswitch | Full market comparison |
| MoneySuperMarket | Cashback offers |
| Compare the Market | Meerkat Meals rewards |
| Citizens Advice | Impartial, no commission |
Comparison sites make the process fast, but they do not always show every tariff — some suppliers sell direct, and some sites hide deals they earn no commission on. Run the same search on at least two sites, and cross-check against Citizens Advice’s free energy comparison tool. Use a recent bill (or your annual kWh figures) rather than estimates, because the ranking changes with your usage.
What to Compare
| Factor | What to Look For |
|---|---|
| Standing charge | Daily fee (varies by region) |
| Unit rate | p/kWh for elec and gas |
| Exit fees | For fixed deals |
| Green tariff | Renewable energy |
A cheap unit rate does not always mean a cheap bill. The standing charge is a fixed daily fee that you pay regardless of usage, and it varies significantly by region and payment method. Two fixes can quote the same unit rate but differ by £60-£100 a year on standing charges alone. Check the total estimated annual cost rather than just the p/kWh figure, and confirm the exit fee in case you want to leave early.
Green Tariffs
Most suppliers now offer 100% renewable electricity tariffs at competitive prices — often within a few pounds of the cheapest standard deal. If a renewable tariff costs less than £30 a year more than the cheapest fix, it can be worth taking purely for the difference it makes. Check the supplier’s Fuel Mix Disclosure rather than trusting marketing: “green” claims vary from genuine renewable-backed tariffs to carbon offsets.
How to Switch in 5 Steps
- Dig out a recent bill and note your annual kWh usage and current tariff name.
- Run quotes on two comparison sites and the Citizens Advice tool.
- Filter by “no exit fee” unless you are certain you will stay put for the term.
- Pick the cheapest fix from a supplier on the Ofgem register of licensed suppliers.
- Complete the switch online — you will get a 14-day cooling-off period and the new supplier handles the transfer. There is no interruption to supply.
Common Mistakes
- Switching for cashback alone. A £30 voucher does not beat a £150 cheaper tariff.
- Ignoring the standing charge. Always compare the total annual cost.
- Paying by monthly cash or cheque. Direct debit discounts are usually worth £50-£80 a year.
- Taking an unregulated broker quote. Some brokers charge hidden fees added to the tariff.
- Forgetting your smart meter. Suppliers have phased out basic meters for new connections; you may need to top up manually if you keep one.
Bottom Line
Energy prices are below the cap. Use a comparison site to find the cheapest 12-month fix for your area, check the standing charge and exit fee, and switch online. The process takes about five minutes, supply is not interrupted, and the saving can be £200+ a year — more with a smart meter and off-peak usage.