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 expected to drop from £1,758 per year to £1,641 for a typical dual fuel residence, slightly lower than the initial forecast of a £138 reduction.
This reduction is attributed to measures outlined in the Government’s autumn Budget last November. Chancellor Rachel Reeves disclosed a £150 reduction in energy bills effective April by eliminating the Energy Company Obligation (Eco) scheme. However, Cornwall Insight mentioned that after factoring in VAT and pricing allowances, the actual reduction would be around £145 per year.
Furthermore, some costs associated with operating and maintaining Britain’s energy networks have offset a portion of these savings. Cornwall Insight reported a slight increase in wholesale prices due to geopolitical factors and anticipates a “relatively steady” 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 in alleviating financial pressure. He highlighted the significance of government interventions in lowering policy costs and minimal impact of wholesale costs on upcoming bills.
Looking ahead, Ofgem is set to announce the next price cap on February 25, covering the period from April 1 to June 30. This cap regulates unit rates of gas and electricity, along with standing charges, without setting a total limit on energy charges based on consumption.
Uswitch noted that all households, irrespective of their tariff type, will witness bill adjustments in April. However, the extent of savings will vary based on individual energy usage – lower energy users will experience smaller savings compared to high-usage households.
A spokesperson from the Department for Energy Security and Net Zero affirmed the Government’s commitment to reducing average costs by £150 from April 1, awaiting Ofgem’s final price cap announcement next week.