Need to know
Forecasts suggest energy regulator Ofgem will slash the price cap by £117
British households could be in for breathing room as energy costs are projected to fall this spring(Image: PA Wire/PA Images)
British households could be in for breathing room as energy costs are projected to fall this spring. Latest industry forecasts suggest the energy regulator, Ofgem, will slash the price cap by £117, bringing the annual bill for a typical dual-fuel household down to £1,641.
The official announcement, expected this Wednesday, marks a shift for consumers who have spent years navigating a volatile and punishing energy market.
Here is what you need to know:
- Ofgem is expected to announce a £117 reduction in the energy price cap to £1,641 for typical dual fuel households from April 1.
- The price cut reflects Chancellor Rachel Reeves’ promise last November that £150 would be cut from the average household bill. She is achieving this by shifting 75% of the Renewables Obligation costs from household energy bills into general taxation and scrapping the Energy Company Obligation scheme.
- The discount will be applied via lower electricity unit rates rather than as a one-off amount, with an expected reduction of around 3.37p per kilowatt hour. Industry analysts Cornwall Insight have said the changes are likely to reduce the cap by about £145 a year once VAT and other pricing allowances are taken into account.
- Households should look out for information from their suppliers after the price cut is announced, particularly around the rates they pay for each unit of gas and electricity. This information will be important for those considering switching to a cheaper fixed tariff.
- Which? recommends looking for deals cheaper than the price cap, not longer than 12 months and without significant exit fees. However, the End Fuel Poverty Coalition warned that this could make switching “even more difficult to gauge”.
- Households may prefer to wait for the dust to settle on Wednesday’s announcement before signing up to a fixed term deal or changing supplier.
- Cornwall Insight currently expects the price cap to remain relatively steady throughout 2026, with a small fall forecast in July.
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