Energy bills are projected to decrease by £117 annually for the typical household starting this April. Cornwall Insight anticipates that the Ofgem price cap will drop from £1,758 per year to £1,641 for a standard dual fuel residence. This revision is slightly lower than the previous estimate of a £138 reduction. The reduction is attributed to governmental measures announced in the previous November’s Budget.
Chancellor Rachel Reeves disclosed that £150 would be slashed from energy bills in April by discontinuing the Energy Company Obligation (Eco) scheme. Despite this, Cornwall Insight stated that the actual decrease would be approximately £145 per year once VAT and pricing allowances are factored in.
Some expenses related to the management and upkeep of the UK’s energy networks have partly offset these savings, as per Cornwall Insight. The group highlighted that wholesale prices have slightly increased due to geopolitical factors, projecting a relatively stable price cap throughout 2026 with a potential small rise in energy bills in July.
Craig Lowrey, principal consultant at Cornwall Insight, emphasized the positive impact of bill reductions on easing financial strain amid current affordability concerns. He stressed the importance of policy cost reductions driven by government interventions, noting minimal wholesale cost impact on upcoming bills.
Lowrey underscored the necessity for investment in building a more secure and resilient energy system, emphasizing the transition’s inevitable costs that necessitate open dialogue. Ofgem is set to announce the next price cap on February 25, covering the period from April 1 to June 30, regulating unit rates for gas and electricity along with standing charges.
Uswitch mentioned that all households will witness bill adjustments in April, regardless of their tariff type. However, the extent of savings will vary based on individual energy consumption – lower energy users will see a smaller reduction compared to higher consumption households.
A spokesperson from the Department for Energy Security and Net Zero reiterated the government’s commitment to reducing average costs by £150 from April 1, with the final price cap figure to be unveiled by Ofgem next week.