Energy bills are projected to decrease by £117 annually for the average household starting this April. According to Cornwall Insight, the Ofgem price cap is anticipated to drop from £1,758 to £1,641 per year for a typical dual fuel residence, slightly lower than the initial estimate of a £138 reduction. This decline is attributed to government measures announced in the autumn Budget last November.
Chancellor Rachel Reeves disclosed that a £150 reduction in energy bills would be implemented in April by eliminating the Energy Company Obligation (Eco) scheme. However, after factoring in VAT and pricing allowances, Cornwall Insight expects the actual reduction to be around £145 per year.
Some costs related to maintaining Britain’s energy networks have partially offset these savings, as per Cornwall Insight. The group reported a slight increase in wholesale prices due to geopolitical factors and foresees a relatively stable price cap throughout 2026, with a projected small rise in energy bills in July.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized the positive impact of bill reductions, alleviating financial strain during these crucial times. He highlighted the significance of government interventions in reducing policy costs, while noting that wholesale costs, though recently making headlines, will minimally impact bills in April.
Lowrey stressed the necessity of investment for a more secure and resilient energy system, highlighting the importance of acknowledging that such a transition will not be without costs. Ofgem is set to announce the next price cap on February 25, covering the period from April 1 to June 30, regulating unit rates of gas and electricity along with standing charges.
Uswitch mentioned that all households will experience billing adjustments in April, irrespective of being on fixed or variable tariffs. However, the savings will vary based on individual energy usage, with lower-energy users seeing smaller savings compared to high-energy users.
A spokesperson from the Department for Energy Security and Net Zero affirmed the government’s commitment to reducing costs by an average of £150 on bills starting April 1, with Ofgem expected to finalize the price cap figure next week.