Every three months, Ofgem reviews the maximum amount that energy suppliers can charge on their default tariffs for energy units and standing charge.
From 1st April to 30th June 2026, the cap is coming down. The average household using electricity and gas and paying by Direct Debit will see their costs reduce by 7%, which equates to a saving of around £117 a year / £10 a month. This brings the average annual dual-fuel bill for a three-bedroom home down from the current £1,758 to £1,641 a year – an 11% reduction compared to the same period last year.
The average saving for those on default tariffs is less than the £150 a year Rachel Reeves promised in her last budget, but that was never an exact figure. Varying network costs and wholesale prices, together with differing levels of energy usage between gas and electricity for households of differing sizes mean the actual saving for people will vary tremendously.
The biggest savings will be seen by homes that use more energy, and those who use less energy might only experience a slight reduction – but all bills should be lower for the same level of energy usage. And most people on fixed deals should also see a reduction because of a blanket change in government policy.
What’s caused this change to the price cap?
The main driver is that two of the green levies currently included in bills have been removed:
1. The energy company obligation (ECO) home insulation scheme has ended.
2. Older renewable energy projects will now be funded from general taxation.
However, additional energy network costs have reduced the savings and, although the price cap has come down over the last three years, it is still 30% higher in real terms than before the energy crisis began in late 2021.
How might the change impact my household?
According to Energy UK, these will be the average annual savings for different household types in April, versus January this year:
| Saving | Total bill reduction | |
| 2-bed flat on dual fuel, prepayment, low energy use | £80 | 6.9% |
| 3-bed terrace on dual fuel, prepayment, typical energy use | £116 | 7.1% |
| Large semi-detached on dual fuel, standard credit, high energy use | £179 | 7.2% |
| Detached on electricity only, direct debit, high energy use | £215 | 12.2% |
However, it’s worth noting that with the current issues surrounding the latest war in the Middle East, the next price cap (1 July) may well be higher, so it’s worth reviewing your finances and checking any energy deals over the next few months in case it’s worth switching.
