Energy consultancy Cornwall Insight forecasts that regulator Ofgem will reduce the cap by £117, taking the typical dual-fuel bill to £1,641 a year from April 1.
If confirmed, it would mark the lowest cap level in almost two years.
Why energy bills are falling
The expected drop is largely driven by Government policy changes announced in last year’s Budget.
Chancellor Rachel Reeves said £150 would be knocked off the average household bill from April.
Once VAT and pricing allowances are factored in, Cornwall Insight estimates the reduction will come in closer to £145 per year.
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.”
Wholesale gas prices have been volatile but remain lower than when January’s cap was set.
Cornwall Insight expects bills to stay relatively steady through 2026, with only a small rise forecast in July.
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Comparison site Uswitch says every household will see some adjustment from April, whether on a fixed or variable tariff.
Richard Neudegg, director of regulation at Uswitch.com , said: “This predicted 7% reduction would take the price cap to its lowest level in almost two years, and could offer some long-awaited breathing room for households still on default tariffs.
“The Government’s promised £150 reduction in energy bills will be reflected for the first time in this coming price cap, alongside the normal quarterly adjustments.”
He also reminds that the headline £117 drop is only an average. Your actual saving depends on how much gas and electricity you use.
Why fixed tariffs could win
He adds that the biggest savings may not come from the cap itself but from switching.
Richard said: “Every single household can expect to see an adjustment in their bills from April, regardless of which supplier they’re with or tariff they’re on.
“But the real winners are households who are on or get themselves on to a cheap fixed tariff before April, as they’ll benefit the most from lower rates on their heating right now, and a further fall in price from April.
“Two-thirds of households are still paying over the odds on standard tariffs.
“By opting for a fixed deal, they could cut their heating bills right now when it matters most, and still see the benefit from the Government’s intervention in April.
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“While the price cap is forecast to fall by 7%, those who are on, or get themselves on to, a cheap fixed tariff could see their bills up to 18% cheaper than today’s standard rates once the reduction kicks in.”
Alastair Douglas, TotallyMoney CEO agreed: “Just remember that loyalty doesn’t pay, but changing suppliers can, and with some undercutting the price cap, you could save an extra £917 per year.
“Switching is simple, with most taking place in just five working days and all your plugs and pipes stay the same, nobody needs to visit your home to make it happen, and your supply won’t be affected during the changeover.”
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What happens next?
Ofgem will confirm the new cap level on February 25, covering the period from April 1 to June 30.
While a 7% cut offers welcome relief after years of soaring bills, experts warn that energy markets remain unpredictable and longer-term investment in the UK’s energy system could keep pressure on costs.
For now, households may finally get some breathing space. But those who shop around could save even more than the headline figure suggests.