UK household energy bills are set to drop by around 7% from 1st April 2026 after a shake-up of how costs are charged. It’s estimated that this will reduce the average annual bill by about £117.
The forecast by the government’s regulators, which will bring a fall in bills, will bring a typical dual-fuel household’s cost down to roughly £1,650 a year, due to changes in how certain charges are funded.
In the Autumn Budget, the Government moved green levies and energy efficiency scheme costs off household energy bills and onto general taxation.
This include ending the Energy Company Obligation (ECO) and shifting most Renewables Obligation (RO) costs, which previously appeared on bills, to taxpayers.
Removing these costs lowers the policy costs component of energy bills, reducing the regulator’s energy price cap from April, although not all the promised £150 saving may show up directly on every bill because.
Despite the price cap announcement, savings vary by household based on how much energy you use and each household’s tariff type.
The UK energy regulator, Ofgem, is expected to confirm the new price cap level for April–June 2026 by late February, and that will formally set the reduced price level.
This Means that a typical household should pay less from April, whether on standard variable tariffs or many fixed deals as suppliers pass on the reduction.
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