Research indicates that fixed energy price tariffs may not live up to their reputation of being beneficial.

In the ever-evolving world of energy, a significant change is underway. According to an analysis by Cornwall Insight, the top ten cheapest fixed-rate tariffs on the open market now offer an average savings of just £5 annually compared to the energy price cap. This marks a significant decline in potential savings, as customers could previously save between £60 and £80 per year.

These fixed energy tariffs, contracts offered by energy suppliers where the price per unit of energy is locked in for a specific period, typically one to three years, have long been the budget-conscious choice for many energy customers. However, the reign of fixed tariffs as the go-to choice might be coming to an end.

Martin Lewis, an expert, suggests that if you find a fixed deal no more than 9% higher than the current price cap, it could be worth considering, despite potential exit fees or limited availability for new customers. This is particularly true for high energy users, who stand to benefit the most from the rate stability provided by fixed tariffs.

However, it's important to note that exit fees for long-term deals can be high, and potential savings should be carefully weighed against these costs. While fixed tariffs provide consumers with protection against price hikes and help with budgeting, they also mean consumers won't benefit if energy prices drop.

The current market situation for fixed-contract energy prices in Germany in 2025 shows an average electricity price of about 26.87 to 27 cents per kilowatt-hour for new customers with an annual consumption of 5,000 kWh. This is a decline from the peak in 2022 due to market stabilization and renewable energy expansion. However, net usage fees have risen to around 547 euros annually, contributing to costs, while some energy suppliers, especially in district heating, face criticism and investigations for potentially abusive price increases.

James Mabey, another expert, predicts that this rise could make fixed energy tariffs more attractive. Despite this, it is unlikely that we will see a return to consistent three-figure savings from fixed energy tariffs anytime soon. The decline in potential savings, coupled with rising energy prices and regulatory decisions reshaping the market, may lead consumers to question if switching is still worth the effort.

Cornwall Insight, an independent firm specializing in energy research, has provided an analysis of the current state of savings from fixed energy tariffs in comparison to the energy price cap. The analysis reveals a shift in the market, with fixed tariffs becoming less attractive to consumers. As we move forward, it will be interesting to see how this trend develops and what it means for energy consumers across the UK and beyond.