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 anticipated to drop from £1,758 per year to £1,641 for a typical dual fuel home, which is slightly lower than the initial estimate of a £138 reduction.
The group attributed this decline to measures outlined in the Government’s autumn Budget announced last November. Chancellor Rachel Reeves disclosed that £150 would be shaved off 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 per year.
Some costs related to the maintenance and operation of Britain’s energy networks have partially offset these savings. Cornwall Insight indicated that wholesale prices have slightly increased due to geopolitical factors, leading them to foresee a relatively stable price cap throughout 2026 with a slight uptick in energy bills expected in July.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized the positive impact of reduced bills in alleviating financial strain. He highlighted the role of government interventions in lowering policy costs, noting that while wholesale costs have been in the spotlight recently, their impact on upcoming bills is minimal.
Lowrey stressed the necessity of investment for a more secure and resilient energy system, especially after recent vulnerabilities exposed by global energy market fluctuations. He urged for transparent discussions on the costs associated with such a transition.
Ofgem is scheduled to announce 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. It does not impose a total limit on energy charges, which are still based on individual energy consumption.
Uswitch affirmed that all households will witness billing adjustments from April, regardless of their tariff type. However, the savings will vary based on energy usage, with lower consumption households experiencing smaller reductions compared to higher usage ones.
A spokesperson for the Department for Energy Security and Net Zero underscored the government’s commitment to reducing bills by an average of £150 from April 1. Ofgem will finalize the price cap figure next week in the usual manner.