A Guide To 2 & 3 Year Fixed Tariffs
Fixed tariffs offer control over your bills and are popular among both residential and business energy customers. The main appeal of fixed-rate tariffs is that they enable you to lock in your unit rate for a specified period, thereby protecting you from potential market fluctuations.
With higher fluctuations over the last few years, the appeal for a fixed-rate deal is stronger, with a lot of people seeking some price certainty for their budgeting.
Is a fixed-rate tariff worth it in 2025? This guide breaks down the most popular fixed-rate tariffs and highlights the benefits of 1, 2 and 3-year fixed.
Fixed-Rate Tariffs for my Business
A fixed-rate deal is often the smart choice for businesses. Especially if the business values certainty and protection from potential volatility. A fixed-rate deal makes sense for your business if you expect prices to increase, you want predictable costs, or you value stability.
You may not want to get a fixed-rate deal if you expect prices to fall by a significant amount, and you need flexibility that a long-term contract doesn’t offer.
Here’s a more detailed breakdown of fixed-rate tariffs:
Advantages of a Fixed-Rate Tariff
-
Great for businesses that want to focus on work without keeping an eye on the energy market to figure out if their bill will be more expensive next month.
-
A fixed-rate deal is ideal for a business that uses a similar amount of energy each month.
-
There are multiple fixed contract lengths to lock in prices for as long as you require.
Disadvantages of a Fixed-Rate Tariff
-
If wholesale energy prices fall lower than fixed unit rates, you could end up spending much more than you need to on gas & electricity.
-
A fixed rate tariff is available in 1, 2, and 3-year options. If you choose a 3-year fixed energy deal, you will not have the flexibility that your business might need.
-
If you do not renew your contract or request a different contract, your supplier will put you on a standard variable tariff. Suppliers can change the unit prices for standard variable tariffs at any time. They are often referred to as the most expensive type of tariff.
What’s The Difference Between 2 & 3-Year Fixed Tariffs?
Whilst largely the same, there are some subtle differences between 2 and 3-year tariffs. For example, a 2-year fixed may offer cheaper unit rates and standing charges than a 3-year deal. This isn’t always the case, so comparing tariffs is always the best option.
2-year fixed tariffs offer the balance between stability and flexibility as they allow you to switch sooner should prices fall.
Why Choose A 3-Year Fixed Tariff?
3-year fixed-rate tariffs offer a little more stability as they lock in your unit rate for 36 months. This is ideal if you’re expecting prices to increase, and it offers the most stability long-term.
| Short-term test of a new supplier | 1-Year Fixed |
| Flexibility & ability to switch sooner | 2-Year Fixed |
| Long-term stability & protection from potential price increases | 3-Year Fixed |
Choosing between a 2- or 3-year fixed energy tariff ultimately depends on your goals, energy usage, and risk appetite.
If you value price stability and predictable bills, a fixed-rate deal can offer peace of mind. A 2-year fix offers flexibility and a good balance between stability and freedom to switch, while a 3-year fix provides longer-term protection from potential price rises.
For businesses, fixed-rate energy deals can make budgeting simpler and protect against unexpected costs, but it’s still important to compare suppliers and review contract terms carefully before committing.
At Love Energy Savings, we help homes and businesses find the best available fixed-rate energy deals so you can lock in great prices and stay in control of your energy costs.