Energy Bills to Fall by 7% in April as Price Cap Drops to £1,641 — What Households Will Actually Save

The latest intervention means household energy bills will fall in April after a government shake-up of charges and a quarterly price cap adjustment, delivering an average annual reduction of £117 for typical dual-fuel homes and wider cuts across England, Wales and Scotland.

Energy Bills: the numbers, the cap and who benefits

The regulator has set a 7% drop in the quarterly price cap for the three months from April, moving the cap for a typical combined gas and electricity household down to £1, 641 a year from the current £1, 758. For many households on variable tariffs governed by the price cap the reduction will equate to roughly £10 a month for those using a typical amount of gas and electricity. Nearly everyone in England, Wales and Scotland will benefit regardless of tariff, although the exact amount saved will vary by household.

The cap is defined by a "typical household" using 11, 500 kWh of gas and 2, 700 kWh of electricity a year, with a single bill for gas and electricity settled by direct debit. For households covered by the cap and using that typical amount, the annual bill will fall by £117 to £1, 641; without the government intervention the price cap would have risen in April.

How the government shake-up and budget changes produced the cut

The fall follows changes announced at the November Budget that moved some policy costs off bills and onto general taxation. The chancellor set out plans to remove about £150 a year of costs from typical bills by scrapping a bill payer-funded energy efficiency scheme and by shifting levies used to support renewable projects into general taxation. Those policy changes are cited as the main driver of the reduced price cap.

At the same time, the cost of maintaining and strengthening energy networks — including power lines, cables and gas pipes — is rising, which has weakened the headline saving. One measure of network costs noted is an increase equivalent to about £6 a month for a typical household; another figure given for network charge increases is £66. These higher network costs mean the intended £150 cut was partly offset, leaving a net saving of £117 for the typical household.

Winners and losers: usage patterns, tariffs and vulnerable households

The design of the changes applies the discount primarily through a lower price per unit of electricity. That means high electricity users are likely to see the biggest benefit; vulnerable households that rely on medical equipment and other high electricity needs are among those who may gain most. Households that use relatively little electricity but a lot of gas will see smaller savings. The reduction will also apply to customers on fixed deals; those customers will be contacted by their supplier in the coming weeks about specific changes to their tariffs.

Broader context: prices, debts and the international squeeze

Despite the cut, domestic energy costs remain roughly a third higher than before Russia’s full-scale invasion of Ukraine triggered a European energy crisis. Bills have stayed elevated since then, pushing energy debts to record levels. Higher costs are attributed in part to continued inflation in gas market prices because of increased imports by tanker from the US and the Middle East, and in part to the costs associated with the country’s energy transition. The 7% reduction is the largest quarterly drop since last summer, but bills remain well above pre-crisis levels.

Warnings about sustainability of the cut and the 2029 cliff edge

Independent analysis referenced in recent commentary suggests the immediate fall could be short-lived. The measures will make the typical energy bill roughly £200 lower than in 2024 in real terms for this year, and about 24% of households are estimated to save more than £200 this year. However, projections point to much smaller gains by March 2029: policy costs and network investment could leave bills just £60 lower on average than today by that point, and the scheduled end of the government’s discount scheme a month later could add another £55. That combination is described as creating a potential "cliff edge" unless ministers set out durable funding choices well before 2029.

Voices on the change and what households should do next

Political leaders and consumer groups have offered contrasting reactions. The prime minister said bringing down bills remains a priority and vowed to keep working to reduce costs for working people. The chancellor framed the Budget changes as delivering the promised cut in costs removed from bills. The Conservative shadow energy secretary criticised the shift as moving some costs off energy bills and onto taxpayers. Market and consumer voices warned that while any fall in bills is welcome, the new level remains unaffordable for many: those on the lowest incomes living in the least efficient homes face continued debt and difficulty staying warm. There are also concerns that changes to how warm home discount costs are recovered could leave some eligible households retaining as little as half of the support in practice.

As the cap changes take effect in April, household advisers are urging billpayers to check communications from their supplier and to shop around for further savings where possible. Recent statements say the government is proceeding with a plan to remove an average of £150 of costs from bills from 1 April, and the regulator will set out the final formal price cap figure in the usual way for the quarter ahead.