The upcoming reduction in energy costs starting April has been confirmed by Ofgem through the announcement of a new energy price cap. From April 1, 2026, the average dual fuel household will see a decrease in their annual energy bill to £1,641, down from the previous cap of £1,758 set on January 1, 2026. It’s important to note that individual bill changes can be estimated by referencing current billing information using an interactive calculator.
The energy price cap determines the maximum allowable charges for unit rates and standing charges; therefore, individual bills may vary compared to the cap figure.
Gas unit rates are expected to decrease from 5.93p per kilowatt hour (kWh) to 5.74p per kWh, with the standing charge dropping from 35.09p per day to 29.09p. Meanwhile, electricity unit rates are set to reduce from 27.69p per kWh to 24.67p per kWh, while the standing charge will increase from 54.75p per day to 57.21p per day.
Ofgem’s Director General, Markets, Tim Jarvis, expressed that the reduction in energy prices is a positive development due to declining wholesale energy costs and ongoing network investments. The adjustment in policy costs following the Chancellor’s budget announcement significantly contributed to the current reduction. Ofgem’s focus remains on cost management and investment facilitation for a more sustainable energy system in the long term.
Increased consumer engagement and competition are evident, with nearly a 20% rise in switching rates annually. More households are opting for time-of-use tariffs offering discounted off-peak rates, and suppliers are introducing a wider array of products, including savings-focused deals for evenings and weekends.
While the price cap ensures protection against overpayment, exploring alternative tariffs or payment methods could potentially lead to further bill reductions. Consumers on fixed deals saved an average of £115 below the cap last year. Therefore, consumers are encouraged to engage with their suppliers to explore available options for potential bill savings.