How to cut your utility bills

A fixed or capped price energy tariff fixes your payments for an agreed period.

The differences between a fixed or capped tariff can be confusing, because energy companies all offer deals called fixed or capped with similar criteria. But generally speaking, capped or fixed tariffs set a maximum level your bills will not rise above for each unit of energy.

However, with a capped tariff you can benefit if wholesale prices fall because with some deals, price falls may be passed on. With a fixed tariff, expect to pay a set amount for each unit of energy for a set term, but may not pass on price falls. Read the small print on all tariffs so you know what to expect.

Reasons to choose a fixed or capped tariff:

• Choose a fixed or capped price energy tariff if you want peace of mind payments won't increase over a set period like 12-24 months.
• These tariffs are sometimes more expensive than standard plans but choosing a fixed tariff holds down costs when wholesale prices are rising.
• These tariffs can offer peace of mind because budgeting is easier when you know how much to pay each month
• Some tariffs pass on price falls so find out if your tariff both caps rises and passes on price falls

Reasons not to choose a fixed or capped tariff:

• Fixed and capped price deals may be more expensive than other variable tariffs
• If prices are falling you may lose out because the tariff may not pass on price falls - this is the case with fixed, but not capped tariffs
• Both fixed and capped tariffs can charge penalty fees of anywhere from £20 to £60 if you leave before the end of the deal. So, if you want to switch supplier before the end of the deal the benefit in savings may be cancelled out by the penalty fee.