Energy bills are set to decrease by an estimated £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. This adjustment is slightly lower than the previous estimate of a £138 reduction. The reduction is attributed to government measures announced in last November’s Budget.
Chancellor Rachel Reeves disclosed that from April, £150 will be shaved off energy bills by eliminating the Energy Company Obligation (Eco) scheme. However, after factoring in VAT and pricing adjustments, Cornwall Insight projects a yearly reduction of around £145.
Despite these savings, certain charges related to the upkeep of Britain’s energy networks have partially offset the benefits. Cornwall Insight noted that wholesale prices have slightly increased due to geopolitical factors and anticipates a relatively stable price cap throughout 2026, with a potential slight rise in energy costs in July.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized the positive impact of bill reductions in light of current economic challenges. He highlighted the importance of government interventions in lowering policy costs, while acknowledging the ongoing need for investment in a secure and resilient energy system.
Ofgem is scheduled to unveil the next price cap on February 25, covering the period from April 1 to June 30. The price cap regulates the maximum charges for gas and electricity unit rates and standing charges. Uswitch confirmed that all households will witness billing adjustments in April, irrespective of their tariff type.
Households are advised that the upcoming reduction is contingent on individual energy consumption, with lower energy users experiencing lesser savings compared to higher consumption households. A spokesperson from the Department for Energy Security and Net Zero reiterated the government’s commitment to reducing bills by £150 on average starting April 1.
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