Fixed energy tariffs could undercut October’s Great Britain price cap by up to £173
Households in Great Britain may be able to lower their annual energy costs by moving from a default tariff to a fixed deal before the price cap rises on 1 October. The Guardian reports that the cheapest cited tariff, from Fuse Energy, is priced at £1,550 a year for a typical-use home, £173 below the incoming cap equivalent of £1,723.
The story
The Guardian reports that households in Great Britain can compare fixed energy tariffs that are priced below the new price-cap level due to take effect on 1 October 2026. Gas and electricity prices under the cap will rise by 4%, taking the annual equivalent for a typical-use household on a default tariff to £1,723. The article says the increase follows a 13% rise at the start of July and applies to 22 million households on default tariffs. Ofgem says fixed tariffs are available at £100 or more below the October cap. The lowest-priced deal cited is Fuse Energy August 2026 Fixed, offered in versions lasting 14 or 18 months, at £1,550 a year for a typical-use home. That is £173 below the October cap equivalent and £113 below the current cap. The report also identifies fixed offers from Co-op Energy, Octopus Energy, E.ON Next and Ecotricity that could provide typical annual savings of more than £100 compared with October’s cap. About 11 million homes, or 35% of the total, are already on fixed tariffs and are not affected by this particular cap rise until their current agreements end. The article advises consumers to check personal usage, contract length and any exit fees before changing supplier or tariff.
Why it matters
The price cap limits default-tariff charges but does not guarantee the lowest available deal. Consumers who can switch without costly exit charges may be able to trade some flexibility for a known tariff price over a set period, commonly one or two years. That could be particularly relevant as heating demand typically rises in colder months. The reported temporary reduction of VAT on domestic electricity, from 5% to zero between 1 October and 31 March 2027, is to be applied automatically and benefits both fixed-tariff and price-cap customers.
Evidence and context
The reported options sit alongside other ways households may reduce energy costs. Ofgem says customers with smart meters may be offered tariffs with cheaper electricity at off-peak times, while reduced energy use remains the most direct way to lower consumption-based charges. The article also notes that the Warm Home Discount scheme is expected to reopen in October, providing a one-off £150 reduction on an electricity bill for eligible people. These measures are separate from choosing a fixed tariff: eligibility, usage patterns and the availability of individual supplier offers determine whether they help a particular household. Price-comparison services can show offers based on a household’s own consumption rather than a national typical-use figure.
Limits and unknowns
The claimed savings are comparisons with a typical annual usage estimate, not a guarantee of what every household will pay. A fixed tariff locks in unit rates and standing charges for its term, so it may be less attractive if market prices fall or if a customer needs to leave early and faces an exit fee. The January 2027 projection is also uncertain: Cornwall Insight forecasts a 9% increase, but the article says the cap figure will not be confirmed until November and could change with wholesale-price developments. Availability and terms of the cited deals may also change.
What happens next
The new cap starts on 1 October 2026. Eligible households can also watch for the Warm Home Discount scheme’s reported October reopening, while the January 2027 cap is due to be confirmed in November; consumers considering a switch can compare current offers and check exit terms before then.
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Story timeline
October price-cap rise begins
The reported 4% increase in Great Britain’s energy price cap takes effect.
Temporary electricity VAT reduction begins
The reported cut in VAT on domestic electricity from 5% to zero begins.
January cap confirmation expected
The article says the January 2027 price-cap figure will be confirmed in November.
Temporary electricity VAT reduction ends
The reported zero rate of VAT on domestic electricity is scheduled to end.
Fixed energy tariffs could undercut October’s Great Britain price cap by up to £173
A short visual explainer for readers who want the story in a different rhythm.
Highlights
- Fixed tariffs could cut energy bills by £173
- Fuse Energy's fixed tariff priced below October cap
- Millions already protected by fixed tariffs
- VAT reduction on electricity helps all customers
Transcript
From October, fixed energy tariffs in Great Britain could cost households up to £173 less annually.
Fuse Energy offers the cheapest fixed deal at £1,550 per year, below the new price cap.
About 11 million homes already use fixed tariffs, avoiding the upcoming price cap increase.
Consumers can also benefit from a temporary VAT cut on electricity from October to March.
Switching to fixed tariffs offers price certainty, especially as heating demand rises this winter.