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 expected to drop from £1,758 annually to £1,641 for a typical dual fuel residence, slightly lower than the previous forecast 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, after factoring in VAT and pricing allowances, Cornwall Insight estimates the actual reduction to be around £145 annually.
Some expenses related to maintaining Britain’s energy networks have partly offset these savings, as per Cornwall Insight. The group noted a slight increase in wholesale prices due to geopolitical factors and anticipates that the price cap will remain relatively stable throughout 2026, with a small uptick in energy bills expected in July.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized the positive impact of bill reductions in alleviating financial pressures. He highlighted that the decrease in policy costs driven by government interventions is the primary driver behind the savings, with minimal impact from wholesale costs on the upcoming April bills.
Lowrey emphasized the necessity of investment for a more secure and resilient energy system, acknowledging that transitioning comes with associated costs. Ofgem is set to announce the next price cap on February 25, covering the period from April 1 to June 30, regulating the unit rates of gas and electricity along with standing charges.
Uswitch indicated that all households will witness adjustments in their bills from April, regardless of their tariff type. However, the extent of the reduction will vary based on individual energy consumption – lower users will see a smaller saving compared to higher-consuming households.
A spokesperson from the Department for Energy Security and Net Zero affirmed the government’s commitment to reducing costs by £150 on average from April 1. Ofgem will provide the final price cap figure next week as per the usual process.