Energy bills are projected to decrease by £117 per year for the average household starting this April. According to Cornwall Insight, the Ofgem price cap is anticipated to drop from £1,758 annually to £1,641 for a standard dual fuel residence, slightly lower than the previous estimate of a £138 reduction.
This reduction is attributed to initiatives announced by the Government in the autumn Budget last November. Chancellor Rachel Reeves disclosed that £150 would be trimmed from energy bills in April by eliminating the Energy Company Obligation (Eco) scheme. However, Cornwall Insight mentioned that the actual reduction would be around £145 annually when factoring in VAT and pricing allowances.
Some expenses related to the maintenance of Britain’s energy networks have partially offset these savings, as per Cornwall Insight. The group noted that wholesale prices have slightly increased due to geopolitical factors and expect the price cap to remain relatively stable throughout 2026, with a predicted small rise in energy bills come July.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized the positive impact of bill reductions amid the current focus on affordability. He highlighted the pivotal role of government interventions in lowering policy costs and stated that while wholesale costs have garnered recent attention, their impact on April’s bills is minimal.
Lowrey stressed the necessity for investment in creating a more secure and resilient energy system, acknowledging that transitioning will come with costs. Ofgem is set to unveil the next price cap on February 25, covering the period from April 1 to June 30, regulating gas and electricity unit rates and standing charges.
Uswitch affirmed that all households will experience billing adjustments starting in April, irrespective of their tariff type. However, it cautioned that the upcoming reduction is consumption-dependent, with lower-energy users seeing smaller savings and higher-energy users benefiting more.
A spokesperson for the Department for Energy Security and Net Zero assured that the Government is delivering on its commitment to reduce average costs by £150 from April 1. Ofgem will finalize the price cap figure in the usual manner next week.