Typical energy bills could drop by £138 this spring
Households are expected to see some relief from high energy costs this spring, with new forecasts suggesting the price cap will fall by around 8% from April.
That would bring the annual cost for a typical dual-fuel household down to about £1,620, a drop of £138 compared with January’s level of £1,758.
The fall is mainly due to recent government decisions that change how certain energy policies are funded.
A large share of the cost of supporting renewable power will move from customer bills to general taxation, and the Energy Company Obligation scheme will not be extended as planned.
Network charges, which help pay for maintaining and upgrading the electricity grid, are still set to rise, but the latest update shows the increase will be smaller than expected.
Wholesale energy prices have also eased in recent weeks, helped by mild winter weather, increased gas supply from the US, and lower demand in Europe. Together, these factors have pushed forecasts for household bills lower.
Experts say the reduction will be welcome for families after two years of volatile prices, but warn that it doesn’t mean energy is becoming cheaper overall.
Dr Craig Lowrey, Principal Consultant at Cornwall Insight, said:
“Households will welcome a cut in April, bringing the cap to its lowest level since 2024. That’s a step towards the government’s £300 reduction target by 2030 and will ease some pressure on both families and policymakers. But we need to be clear – costs aren’t vanishing, they’re shifting.”
He added that longer-term savings depend on investment in clean energy and protecting vulnerable households through targeted support.
The Department for Energy Security and Net Zero is currently consulting on how the Warm Home Discount is funded. Any changes from that review have not been included in the current forecasts.
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