Need to know
Ofgem will announce the new energy price cap from April 1 on Wednesday morning
Energy bills will drop significantly from April, according to the latest predictions (Image: Yau Ming Low via Getty Images)
What you need to know as energy bills to drop from April
- UK households are set to see their energy bills drop from April as Ofgem prepares to announce a reduction to the energy price cap. The energy regulator will confirm the spring price cap in an announcement on Wednesday morning, February 25.
- The regulator is expected to lower the cap by approximately 7 per cent, around £117 annually to £1,641 for a typical dual fuel household from April 1. This follows chancellor Rachel Reeves’ pledge to slash £150 from average household bills by abolishing the Energy Company Obligation scheme.
- However, families have been warned not to expect a straightforward £150 discount on their bills. The reduction will vary depending on household size, type and energy consumption, with savings mainly applied through lower electricity unit prices.
- Cornwall Insight said the changes will reduce the cap by roughly £145 annually once VAT and pricing allowances are factored in. Network charges and volatile wholesale gas prices due to “geopolitical factors” have offset some of the potential savings.
- Ned Hammond from Energy UK 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.” He added that households will experience “significantly different savings” depending on their energy consumption.
- 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.” She advised residents to watch for communications from their energy providers about how the changes will affect their specific bills.
- Energy experts are encouraging households to pay attention to changes in unit costs and standing charges rather than focusing solely on headline figures.
- READ THE FULL STORY: How much energy bills are expected to drop ahead of Ofgem price cap announcement
