Britons could see a decrease in their energy bills as the government plans to implement changes that would result in an average reduction of £150 per household. Households are anticipated to learn soon whether their bills will decrease by approximately 7% starting in April. Projections indicate that Ofgem may lower the energy price cap by £117 to £1,641 annually for a typical dual fuel household from April 1, with the formal announcement scheduled for Wednesday. Chancellor Rachel Reeves announced in November that the average household bill would be reduced by £150 in April by discontinuing the Energy Company Obligation (Eco) scheme introduced by the previous Tory government.
Consumers are advised not to expect a flat £150 reduction on their bills as the actual amount will vary based on household size, type, and energy consumption levels. The anticipated reduction is likely to be primarily implemented through a decreased unit price of electricity usage. Cornwall Insight mentioned that the adjustments are expected to reduce the cap by around £145 annually, factoring in VAT and pricing allowances within the cap methodology. However, cost increases associated with the maintenance of the UK’s energy networks have partly offset these savings.
Wholesale prices have slightly increased since the last forecast in December, with gas prices particularly affected by geopolitical factors. Looking ahead, Cornwall Insight predicts that wholesale costs remain lower than when Ofgem set the January cap level, and expects the cap to remain relatively stable throughout 2026, with only a minor increase projected in July.
Ned Hammond, Deputy Director of Customer Policy at Energy UK, welcomed the government’s initiative to lower energy bills, especially during a time when many households are facing financial challenges. He emphasized that while the average household is expected to save £150, individual savings will vary based on energy consumption. Other factors such as network charges and wholesale costs may influence the actual reduction in energy bills. The price cap is forecasted to drop by around £115 starting from April 1.
Emily Seymour, the energy editor at Which?, highlighted that households can look forward to significant energy bill reductions in April, providing relief to those grappling with rising living costs. She advised that the majority of the reduction is likely to affect electricity prices, and consumers should watch for communications from their energy providers for details on how the changes will impact their bills.
Simon Francis, Coordinator of the End Fuel Poverty Coalition, recommended that households pay attention to changes in unit costs and standing charges rather than focusing solely on the average energy bill figure. He stressed that consumers should be vigilant about tariff changes and urged Ofgem to ensure fairness in the market by preventing discriminatory practices in energy pricing.
