With the price cap falling this July, now could be the time to switch. Should we fix our energy price or stick with the cap?
From July 1, the UK’s energy price cap is falling by 7%. That means the average household should see bills go down by around £129 a year. Sounds like good news – and it is. But it also opens the door to a big question: is now the right time to switch to a fixed energy deal?
Martin Lewis says even though the price cap is down by 7%, we could save 10% more via the cheapest fix.
Fixed vs Variable – What’s the Difference?
Right now, most of us are on standard variable tariffs, where the price moves up or down with the cap set by regulator Ofgem. When the cap drops, our bills drop too. But when it rises, we pay more. Some experts say it might in October, we get hit with higher bills.
Fixed tariffs let us lock in a set price for 12 months or more. That means even if energy prices shoot up again, what we pay stays the same. Some of the top deals right now, like those from Outfox the Market or Octopus, are cheaper than the current cap. And some don’t even charge an exit fee, which means we can leave any time without paying a penalty.
Martin Lewis’ Rule of Thumb
Not sure if fixing now will save money? It’s predicted over the next year, we will pay 3% less than current Price Cap on a price-capped tariff. But prices may rise again in early 2026. So, Martin Lewis has a simple rule:
- Fixed tariff more than 6% cheaper than the current cap – very likely to save.
- Fixed tariff is 3–6% cheaper – probably a good deal.
- Fixed tariff is less than 3% cheaper – not worth it, best to stay on the cap.
Check MSE’s up-to-date top energy deals to see which fixes beat the cap right now.
What’s Best for Us Right Now?
For people on a tight budget, peace of mind is priceless. A fixed tariff gives us that – we know what’s coming, and we won’t get stung by surprise hikes. It’s especially helpful for families trying to plan ahead and budget or those worried about winter costs.
But if we think prices will keep falling, staying on a variable tariff could save us more in the short term. But Martin Lewis says for the time being, staying on the price cap will mean us overpaying.
With deals now cheaper than the cap, and many with no lock-in, it’s a good time to shop around and switch if we find something better.
So whether we want safety or flexibility, the power’s in our hands… and we could save big just by taking a look.
Image: Yau Ming Low / Shutterstock
