Household energy bills in the UK are expected to fall by around £117 from April, as government policy changes offset modest increases in wholesale prices, according to industry analysts.
Energy consultancy Cornwall Insight predicts that the Ofgem price cap will drop 7 per cent to £1,641 a year for a typical dual-fuel household when it is reset on 1 April. The reduction is slightly smaller than the firm’s previous forecast of an 8 per cent, or £138, cut, reflecting a recent rise in wholesale energy costs. Ofgem is scheduled to confirm the official cap level by 25 February for the period running to 30 June.
The projected fall follows measures announced in last November’s budget by Chancellor Rachel Reeves, including the scrapping of the Energy Company Obligation scheme. Cornwall Insight estimates these policy changes will reduce the cap by about £145 a year once VAT and pricing allowances are taken into account. Higher network charges, which cover the operation and maintenance of Britain’s energy infrastructure, have partially offset the saving.
Wholesale gas prices have been volatile in recent weeks due to geopolitical tensions, but remain below the levels seen when the January price cap was set. Cornwall Insight expects bills to remain “relatively steady” through the rest of 2026, with only a modest rise forecast for July.
Craig Lowrey, principal consultant at Cornwall Insight, said any reduction in bills would be welcome at a time when affordability is a major concern. “The fall in policy costs is doing most of the heavy lifting, and while wholesale prices have been in the headlines, their impact on April’s bills is limited,” he said. Lowrey added that keeping bills down will be challenging as the UK invests in modernising energy networks and reducing reliance on imported gas. “There needs to be an honest conversation that the transition to a more secure energy system won’t be cost free,” he said.
A spokesperson for the Department for Energy Security and Net Zero said the government was delivering on its promise to cut average household costs by £150 from April. Comparison site Uswitch said all households would see adjustments to bills regardless of supplier or tariff type. It noted, however, that actual savings will depend on individual consumption, with larger reductions for higher-usage households.
Simon Francis of the End Fuel Poverty Coalition urged consumers to look beyond the headline average figure and examine unit rates and standing charges when the final cap is announced. Analysts have cautioned that while the projected drop offers short-term relief, structural pressures on the energy system mean long-term stability remains uncertain.
Households across the UK will now await the formal announcement from Ofgem later this month, which will set out the exact cost of gas and electricity for the coming quarter.
