Ofgem’s price cap only applies to standard variable tariffs. Fixed tariffs have agreed prices that don’t change during the fixed period you’ve signed up for with your energy supplier.

What’s the difference between a standard variable tariff and a fixed price tariff?

If they haven’t chosen another tariff, many households are on a standard variable tariff automatically. Prices on our standard variable tariff go up and down when Ofgem’s energy price cap changes.

The alternative option is choosing a fixed price tariff, which is a way to protect your energy prices for the length of your contract.

Figuring out which option works for you is one of the most effective ways to protect yourself from energy price changes today. The choice ultimately comes down to whether you would rather stay on SVT and see your prices change with the price cap, or if you want to choose a set rate which offers clarity on what you will pay for your energy for the duration of your contract.

The Ofgem energy price cap

In January, April, July, and October, Ofgem reviews what suppliers are paying for energy on the global wholesale market. The energy price cap limits the maximum amount suppliers can charge for each unit of gas and electricity (kWh) and sets a limit on the daily standing charge, but it does not cap your total bill. So even with a price cap, your total cost can still go up if you use more energy.

So, what are the pros and cons of a standard variable tariff? If the energy price cap goes down, then you may see a decrease in your bill, but you also face the risk of your energy costs rising if the price cap goes up.

What’s the benefit of a fixed price tariff?

A fixed price tariff offers protection when budgeting for energy price rises. For a set period, usually 12 months, your supplier guarantees the exact cost of each unit (kWh) of energy you use. Even if Ofgem announces an increase to the cap, your unit rates and standing charges remain the same.

The good news is that if you’re on a fixed price tariff with ScottishPower, and Ofgem’s energy price cap goes down, then you will be able to change your tariff to the best option available without paying exit fees.

You can find your current contract end date on a recent bill or in your online account, and you can make sure you’re on the best rate available in your online account or the ScottishPower App.

Should I choose a standard variable tariff or a fixed price tariff?

Your choice between a fixed price or standard variable tariff is a personal decision. This simply means asking yourself how important price certainty is to you.

Fixing buys certainty, while staying variable suits those who can handle occasional bumps to chase potential lower averages. Just remember that whether your energy prices are limited by the price cap on a standard variable tariff, or you’re on a fixed price tariff, your total bill will still depend on how much energy you use.

Understanding unit rates vs. standing charges

Look at your monthly bill and look beyond the final total to find your energy use measured in Kilowatt-hours (kWh).

By comparing your energy costs across different months, you can easily spot your seasonal energy use trends.

Your total cost is split into two distinct parts:

You’ll still need to pay your daily standing charges, even if you’re not at home or you’re away on holiday.

Smart tools for tracking your energy use

With a smart meter, you can use Energy Insights¹in the ScottishPower App. It shows how much energy you use and what it costs, so you can set a budget and keep on top of what you’re using - whether that’s heating, cooking, lighting, or electric devices on standby. heating.