The Ofgem price cap limits how much you can be charged for unit rates of gas and electricity, as well as the standing charges
Energy bills are set to fall this April(Image: GETTY)
Energy bills are expected to fall by £117 a year for the average household from this April.
Cornwall Insight predicts the Ofgem price cap will fall from £1,758 a year to £1,641 for a typical dual fuel home. This is slightly down from its previous prediction of an £138 reduction.
The group said the decrease is down to measures announced by the Government in the autumn Budget last November.
Chancellor Rachel Reeves revealed that £150 would be cut from energy bills from April by removing the Energy Company Obligation (Eco) scheme.
However, Cornwall Insight said the reduction would be about £145 a year once VAT and pricing allowances are taken into account.
Some charges associated with the operation and maintenance of Britain’s energy networks have also offset part of these savings, they added.
Cornwall Insight today said wholesale prices have risen slightly due to “geopolitical factors” and the group now expect the price cap to remain “relatively steady” throughout 2026. They predict “a small rise” in energy bills in July.
Craig Lowrey, principal consultant at Cornwall Insight, said: “Any reduction in bills is positive, easing pressure at a time when affordability really matters.
“It’s the drop in policy costs, as a result of Government interventions, that is doing most of the heavy lifting and, while wholesale costs have come back into the headlines in recent weeks, the impact on April’s bills is minimal.”
He added: “Investment is needed if we want an energy system that is more secure and resilient, after the consequences of exposure to global energy markets were made all too apparent in recent years.
“However, there needs to be an open conversation about the fact that such a transition will not be cost free.”
Ofgem will announce its next price cap on February 25 – this will cover three months from April 1 to June 30. The price cap limits how much you can be charged for unit rates of gas and electricity, as well as the standing charges.
It does not set a total limit of how much you can be charged for energy – your bill is still based on how much gas and electricity you use.
Uswitch said all households will see an adjustment in their bills form April, regardless of whether they are on a fixed or variable tariff.
But it added: “It’s important to remember this upcoming reduction is based on personal energy usage – households that use less energy will see a smaller saving, while higher-usage households will see a larger one.”
A spokesperson for the Department for Energy Security and Net Zero said: “This Government is delivering on our promise to take an average of £150 of costs off bills from April 1.
“Ofgem will set out the final price cap figure in the usual way next week.”