Energy bills are anticipated to decrease by £117 per year for the average household starting this April. According to Cornwall Insight, the Ofgem price cap is projected to drop from £1,758 annually to £1,641 for a typical dual fuel residence, slightly lower than its previous estimate of a £138 reduction. This reduction is attributed to governmental measures announced in the autumn Budget last November.
Chancellor Rachel Reeves disclosed that £150 would be shaved off energy bills from April by eliminating the Energy Company Obligation (Eco) scheme. Nevertheless, Cornwall Insight noted that after factoring in VAT and pricing allowances, the actual reduction would be around £145 annually.
Some costs related to maintaining Britain’s energy networks have partially offset these savings. Cornwall Insight reported that wholesale prices have slightly increased due to geopolitical factors, expecting the price cap to remain relatively stable throughout 2026 with a projected small rise in energy bills in July.
Craig Lowrey, principal consultant at Cornwall Insight, highlighted the positive impact of bill reductions in relieving financial pressure amid concerns about affordability. He emphasized the significance of government interventions in reducing policy costs and downplayed the minimal impact of wholesale costs on upcoming bills.
Lowrey emphasized the necessity of investments for a more secure and resilient energy system following recent global energy market challenges. He stressed the importance of acknowledging that such a transition will involve costs.
Ofgem is set to announce the next price cap on February 25, covering the period from April 1 to June 30. The price cap regulates the unit rates for gas and electricity as well as standing charges but does not impose a total limit on energy charges based on consumption.
Uswitch stated that all households will witness adjustments in their bills from April, irrespective of their tariff type. However, the savings will vary based on individual energy usage, with lower usage households benefiting less than higher consumption households.
A spokesperson for the Department for Energy Security and Net Zero affirmed the government’s commitment to reducing costs by an average of £150 per bill from April 1. Ofgem will finalize the price cap figure in the usual manner next week.
