Fixed or variable. Which is right for you?

Name:  20210930_Blog_FixedOrVariable-26.png
Views: 15522
Size:  68.5 KB


Confused on what’s right for your household? It can be a bit puzzling, especially if you haven’t a clue when it comes to energy. However, choosing the right tariff for you is a critical part of your household budget. That’s why we’re here to help you make the right decision. How? Keep reading!


Fixed or variable tariffs explained.

There two types of energy tariffs:

Fixed rate tariff - This means the prices are fixed for the length of your tariff – so unit rates and standing charges will stay the same until your tariff ends, but the amount you pay will change depending on how much energy you use. Your unit rate is the amount you pay for every unit of energy you use, which is measured in kilowatt hours (kWh). Your standing charge is a daily rate which pays for the access to your energy. This covers your energy’s journey from the generators across all the wires and right into your home.

Variable (flexible) tariff - Here at E.ON Next the variable tariff is referred to as a flexible tariff. This tariff has variable prices which means that the amount you pay for your energy (i.e. your unit rates and standing charge) can go up and down depending on wholesale energy prices.


Fixed rate advantages:


  • You don't need to worry about any price hikes your energy supplier implements. For the duration of your contract the amount you pay never goes up or down.
  • Budgeting is made easier as you know exactly how much you pay for your energy.
  • Though prices are often higher in the short term, you could make a high level of savings over a number of years.



Fixed rate disadvantages:


  • You may miss out on a better deal, as you’d be bound by contract.
  • If there are any decreases in gas and electricity prices, you won’t enjoy a reduction on your bill.
  • There may be cancellation charges if you feel unhappy with your energy supplier, or have found a cheaper tariff elsewhere.



Variable (flexible) rate advantages:


  • You can switch at any time. This is a flexible approach.
  • The cost of wholesale energy can go down as well as up, meaning that you could pay less for the same amount of energy if wholesale costs drop.



Variable (flexible) rate disadvantages:


  • Increases in wholesale prices could result in your bill surpassing your budget.
  • They’re usually more expensive than fixed rate tariffs.


The right choice for you very much depends on the needs of your household. If you’re after a low-maintenance, affordable tariff, then a fixed one might be your best bet.

However, if you want to make sure you’re always getting the best deal, and the lowest prices on the market, then you’d be better off with a variable (flexible) rate deal.

Whatever you choose, we’re on hand to help you.

Get a quote today!