If you pay the energy bills in your household in England, Scotland or Wales, you’re very likely to save money from 1 April. And thankfully, you don’t need to do anything to see the savings.
Estimates of exactly how much less you’ll pay vary, but the government has suggested that a household with typical energy use will save around £150 per year.
The change will apply to electricity rates. You’ll see a reduction regardless of the type of tariff you have, unlike the energy price cap which only applies if you’re on a variable energy tariff.
The saving is due to the government removing the cost of two of its environmental schemes from everyone’s bills.
Almost all energy suppliers fund both schemes, so now that they no longer have to pay they will have to to pass the savings on to you. Look out for communication from your energy supplier telling you your new rates.
A few small energy suppliers only had to fund one scheme. So if you’re a customer of one of these companies you’ll see smaller savings – keep reading to see if yours is among them.
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Will my energy bills drop?
Yes, all domestic electricity bills in England, Scotland and Wales will be reduced from 1 April. How much you’ll save depends on whether your supplier is involved in funding two government schemes: the Energy Companies Obligation (ECO) and Renewables Obligation (RO).
The ECO scheme has been scrapped so can be removed from customers’ bills from 1 April. Three-quarters of the cost of the RO scheme will move from energy bills to general taxation.
A few small suppliers didn’t have to fund the ECO scheme. So they won’t have savings from this to pass on to their customers. They include:
- 100Green
- Fuse Energy
- Good Energy
- Home Energy
- Tulo Energy.
If you’re a customer of one of these providers, you should still get a smaller saving from the RO scheme’s partial removal from bills. Your supplier will tell you what the saving looks like for your tariff.
The savings apply to all tariff types including:
- Variable tariffs
- Fixed tariffs
- Tracker tariffs
- Time-of-use tariffs.
If you’re on a variable tariff, the lower price cap on energy tariffs from 1 April will take into account these savings.
Find out more: what is the price cap?
How much will I save?
Your exact saving will depend on how much electricity you use.
The saving comes as a lower unit rate for electricity, which means households that use more electricity will see a bigger effect on their bills.
Look out for communication from your energy firm telling you:
- your new rates
- how much money you’ll save.
If you’re on a fixed tariff, the new rates will apply from 1 April until the end of your contract. If you’re on a variable tariff, your rates will change in line with the price cap, which reflects these updates as well as other energy price changes.
See how to get the best energy deal, including the top five cheapest tariffs now.
Can I switch energy tariff in March?
Yes, you can still switch energy tariff and provider before the price changes take effect on 1 April.
It’s likely to be more complicated than usual to work out whether, or how much, you’ll save.
To compare prices accurately, you’ll need to know how your current tariff’s rates are changing. You’ll also need to check whether you’re being quoted prices for new tariffs at their current rates, or the lower rates after 1 April.