Energy Bills to Fall by 7% in April After Price Cap Cut and Charges Shake-up

Typical household energy bills will fall by 7% in April as Ofgem confirms a price cap reduction following a government shake-up of charges, a move that will automatically apply savings to bills from 1 April and affect millions of households.

What Energy Bills will look like from April

The regulator has set the average annual dual-fuel price cap at £1, 641 from April, down from £1, 758 now, a reduction equivalent to about £117 a year for a household using a typical amount of gas and electricity. For many households on variable tariffs governed by the price cap, the change will be roughly £10 less per month.

Why the price cap has fallen and why the saving is smaller than promised

The drop stems from recent changes to policy charges announced at the Autumn Budget that remove or reallocate a chunk of green levies from bills. The government had used a headline figure of £150 a year as the intended average saving, but rising costs for running and upgrading the energy network — including power lines, cables and gas pipes — are adding roughly £6 a month for a typical household and have reduced the net saving to about £117.

How the price cap changes work and the unit and standing charge shifts

The cap restricts how much suppliers can charge on default tariffs for each kilowatt hour of electricity and gas and for standing charges. At present the maximum unit rate for direct-debit electricity is 28p per kWh (rounded), and gas is 6p per kWh; from 1 April the electricity figure will move to 25p per kWh while gas remains at 6p per kWh. Average daily standing charges, currently around 54. 75p for electricity and 35. 09p for gas (a combined total close to 90p), will move to roughly 57. 21p and 29. 09p respectively, a combined total of just over 86p from 1 April.

Who benefits, who benefits most, and the household picture

Nearly everyone in England, Wales and Scotland will see some benefit regardless of tariff, but the exact discount depends on household size, type and energy usage. The main reduction will be applied through a lower unit price for electricity, so households with high electricity use — including some vulnerable households that rely on medical equipment — are likely to see the largest reductions. Households that use relatively little electricity and a lot of gas will see smaller gains.

Fixed deals, suppliers and what customers should expect next

About 40% of homes are on fixed deals. The policy changes will also reduce bills for many customers on fixed contracts; suppliers will contact affected customers in the coming weeks with details. Ofgem has enforcement powers to ensure suppliers pass on savings. Some smaller suppliers were never part of the Energy Company Obligation scheme and their customers have already been exempt from those costs.

Context, cautions and consumer guidance

While wholesale prices have been described as stable and down over the past three months, overall bills remain around a third higher than before the war in Ukraine and household energy debts have risen. Comment from senior ministers frames the change as the start of a turnaround and a way to put more money into people’s pockets, while opposition figures warn that some costs have been shifted off energy bills and onto general taxation. Consumer advisers note that most fixed deals are expected to fall by a similar margin, though not all, because some firms were exempt from previous levies.

Practical takeaway for billpayers

• Savings will be applied automatically for energy used from 1 April; no action is required to receive the changes.
• The exact amount each household saves will depend on how much energy is used and the type of tariff held.
• Households are encouraged to shop around for further savings, as the individual benefit varies by consumption and tariff type.

Price cap reviews take place every three months; without the recent government intervention the cap would have risen in April. The 7% fall is the largest drop since last summer, but households should note network costs and other moving parts will continue to affect bills going forward.