UK Energy Bills to Drop by £117 from April 2026

From 1 April 2026, the Ofgem price cap will drop by 7%, reducing the average annual energy bill by £117 (or £10 per month) for a typical household. This reduction is a direct result of government intervention at the last Budget, where £150 was cut from bills by scrapping the Energy Company Obligation (ECO) scheme—deemed no longer fit for purpose—and asking the wealthiest to pay their fair share.

• Targeted Support: The government’s actions will particularly benefit lower-income households, who use more electricity and stand to save more.
• Warm Home Discount: Around 6 million households have already received the £150 Warm Home Discount, expanded last year to include all eligible households on means-tested benefits.

Broader Cost-of-Living Measures

The price cap reduction is the latest milestone in the government’s mission to cut living costs. Since July 2024, the government has taken steps to ease financial pressures, including:

• Increasing the national minimum and living wage.
• Freezing prescription fees and rail fares (for the first time in 30 years).
• Rolling out free breakfast clubs in schools.
• Expanding the Warm Homes Plan, a £15 billion scheme to upgrade 5 million homes and lift 1 million households out of fuel poverty by 2030.

Long-Term Solutions: Clean Energy and Grid Investment

While the price cap reduction provides immediate relief, the government is focused on long-term solutions to end high energy bills for good. This includes:

• Accelerating renewable energy projects, with a record number secured since July 2024.
• Investing in new nuclear power, the largest in a generation, to reduce reliance on volatile fossil fuel markets.
• Modernizing the electricity grid, reversing decades of underinvestment to lower constraint costs and protect billpayers in the long term.

Statements from Government Leaders

• Prime Minister Keir Starmer: "Energy bills are at the front of everybody’s mind, and I know they’ve been too high for too long. [...] Today, because of the actions this government took at the last Budget, the price cap on energy bills has come down by £117. [...] But I know there is more to do—and my government is pulling every lever to bear down on the cost of living."
• Chancellor Rachel Reeves: "Cutting the cost of living is this government’s number one priority. [...] We are cutting the cost of living, cutting the national debt, and creating the conditions for growth and investment in every part of the country."
• Energy Secretary Ed Miliband: "This government is keeping our promise to bring down bills for good. [...] We are determined to go further and end the era of high bills for good, with our clean energy mission to get off the fossil fuel rollercoaster."

Next Steps and Ongoing Support

In the coming weeks, ministers will hold a roundtable with major energy suppliers to ensure savings are passed on to all eligible households, including those on fixed tariffs. The government remains committed to long-term action, including:

• Expanding renewable energy to stabilize bills.
• Delivering the Warm Homes Plan to improve energy efficiency.
• Ensuring grid investments are completed to avoid future cost spikes.