Company has confirmed that all customers, including those on fixed-term deals, will benefit from £134 yearly savings
Octopus Energy has given the green light, confirming that every single customer will reap the rewards of the energy savings unveiled in the budget.
During her budget speech, Chancellor Rachel Reeves announced that households across England, Scotland and Wales can expect their energy bills to drop by roughly £150 annually thanks to fresh government intervention.
She slashed a raft of green levies currently being shouldered by consumers, axing the government’s energy company obligation scheme altogether and trimming what families fork out for the renewables obligation scheme via their monthly bills.
Concerns had been mounting about whether those locked into fixed-term contracts would see any benefit. Octopus has now put those worries to bed.
Both variable tariff customers and those on fixed-term agreements will witness their bills tumble automatically from 1 April, mirroring the shift in policy expenditure.
According to Octopus Energy, these policy reductions will slash a typical customer’s annual bill by approximately £134. “These changes will bring a welcome relief to customers, and we’ll pass them through on all of our tariffs as soon as they kick in, so no one misses out,” said Greg Jackson, the company’s CEO.
British Gas has told MoneySavingExpert that it will hand savings from the policy shake-up to all its customers, though it’s remaining tight-lipped on exactly when that will happen.
However the company said electricity prices are on track to jump by a fifth over the next four or five years. Octopus Energy’s Rachel Fletcher told MPs recently that the Government should urgently consider changing how wholesale gas prices drive changes in UK energy costs in order to help British households.
Energy bosses also blamed “complex regulations” for the UK having higher wholesale energy prices than some other European countries, during an Energy and Net Zero Select Committee session.
Ms Fletcher, director for regulation and economics at Octopus Energy, said the calculation of gas prices within the UK wholesale energy market needs to be looked at. She said: “There are proposals on the table we think the Government should be looking at to take gas out the wholesale market and put it into a strategic reserve.
“I think that needs very serious and urgent consideration.
“If we continue on the path that we are on right now, in all likelihood electricity prices for a typical customer are going to be 20% higher in four or five years’ time than they are now, and that’s even if wholesale prices halve.”
Meanwhile, Simone Rossi, the chief executive of EDF UK, called on the UK to ease regulatory burdens in order to help bring energy prices lower.
He said: “The point is that bills are very high and there are things we can do to reduce them.
“From point of delivery, the cost of serving customers in the UK is about £100 per annum, and in France it is 45 euros, so more or less half.
“This is not to do with wholesale price or gas marginal costs but is driven by the fact we have a very complex regulation which has become more sophisticated over the years.”
A Department for Energy Security and Net Zero spokesperson said: “We categorically reject this speculation. Wholesale gas costs for households remain 75% higher than they were before Russia invaded Ukraine in 2022, and the main reason energy bills remain high.
“The only way to bring down energy bills for good is by making Britain a clean energy superpower, which will get the UK off the rollercoaster of fossil fuel prices and onto clean, homegrown power that we control.”