Households across Britain are expected to see energy costs fall this spring, offering potential relief and a positive outlook as the regulator prepares to announce a lower price cap.
Energy regulator Ofgem is forecast to cut the default tariff price cap by about £117 to roughly £1,641 per year for a typical dual-fuel household from 1 April.
The change follows government policy announced by Chancellor Rachel Reeves, who said £150 would be removed from average household bills by abolishing the Energy Company Obligation (ECO) scheme introduced under the previous Conservative government. This means households with different energy needs and sizes may see varying savings, so reviewing your specific bill details is important.
Officials warn the reduction will not appear as a flat £150 discount. Instead, savings will mainly come through a lower unit price of electricity, with the final impact varying by:
- Household size
- Energy consumption levels
- Supplier billing structures
Consultancy Cornwall Insight estimates the cap could fall by about £145 annually after accounting for VAT and network pricing adjustments.
However, rising costs linked to Britain’s energy infrastructure, including maintenance and distribution networks, have offset some of the potential savings.
Wholesale gas prices remain volatile due to geopolitical tensions affecting global energy markets.
Analysts expect the cap to remain broadly stable through 2026, with only a small possible increase projected around July.
Energy suppliers are expected to issue guidance explaining how the cap change affects individual bills after the official announcement. Contact your provider or visit their website to understand how these changes will impact your specific energy costs.
Households are advised to review tariff information and monitor usage patterns to maximise savings. Checking your current energy plan and comparing it with available options can help you identify potential savings opportunities.
Ned Hammond, deputy director of customer policy at Energy UK, which represents firms, said: “At a time when many households are struggling with their bills, action taken by the Government to provide a considerable discount on energy bills is hugely welcome.
“While the saving will be £150 for the average household, it is important to note that the discount is applied to the unit rate. Therefore, households will experience significantly different savings depending on their energy consumption, some much higher and others substantially lower than £150.
“In addition, other moving parts, such as network charges and wholesale costs, mean energy bills will not necessarily fall in line with the saving provided. Indeed, the price cap is projected to drop by around £115 from 1 April.”
Which? energy editor Emily Seymour said: “Households can expect a significant cut to their energy bills in April, which will come as a relief to millions of people struggling with cost-of-living pressures.
“The bulk of this change is expected to be applied to your electricity price per unit, so your exact savings will depend on your usage; look out for communications from your energy provider in the coming weeks to see how it will affect your bills.”
