Around 6.8 to 7 million households across Great Britain are expected to see their annual energy bills fall by up to £200 from April 2026, following the next scheduled update to the regulated energy price cap. The reduction is expected to be confirmed on 25 February 2026, when Ofgem publishes its decision on the maximum unit prices and standing charges for gas and electricity. The new cap will apply for the three-month period beginning on 1 April 2026.
The adjustment reflects a combination of lower wholesale energy prices and changes to how government support for household energy bills is funded. According to industry forecasts, the impact of these measures will be felt most clearly by households on standard variable tariffs, who remain directly covered by the price cap. This was reported by The WP Times editorial team, citing regulatory guidance from Ofgem and coverage published by specialist UK energy market media.
How many households are affected by the price cap
The regulated energy price cap applies to around 19 million households across Great Britain, according to figures published by Ofgem. These households are supplied on standard variable tariffs, meaning their energy prices can change in line with the cap rather than being fixed for a set period. Customers on standard variable tariffs typically include those who have not actively switched supplier or tariff, as well as households whose previous fixed-term contracts have ended and reverted to default pricing. As a result, this group represents a significant proportion of domestic energy consumers.
The price cap does not place a limit on the total amount a household pays for energy over the year. Instead, it regulates the maximum unit rates suppliers can charge for gas and electricity, along with the daily standing charges applied to cover fixed network and system costs. Because household energy bills are calculated by multiplying unit prices by consumption, total costs continue to vary depending on factors such as property size, insulation, heating systems and usage patterns. Households with higher-than-average consumption therefore pay more in absolute terms, even when the cap is lower.
However, changes to the price cap directly affect the underlying prices charged per unit of energy. This means that any adjustment to the cap has an immediate and measurable impact on the cost of gas and electricity for millions of households, regardless of individual usage levels. The cap does not apply to customers on fixed-price deals agreed before the start of the cap period. Those households continue to pay the rates set in their contracts until they expire or are changed.
What the April 2026 reduction is expected to deliver
Forecasts published by energy consultancy Cornwall Insight indicate that, based on current wholesale market prices and assumptions about network and policy costs, the energy price cap from April 2026 could fall by the equivalent of around £117 a year for a typical household.
When this reduction is combined with the government’s long-term energy bill discount scheme, total annual savings for millions of households are expected to exceed £200. According to the modelling, approximately 6.8 million householdscould see savings at or above that level once both measures are taken into account. The estimates are based on standard consumption assumptions used by the regulator and reflect average household usage rather than individual circumstances. Actual savings will continue to vary depending on energy consumption and household characteristics.
How the energy price cap is calculated
The energy price cap is reviewed every three months by Ofgem and is intended to reflect the underlying costs faced by energy suppliers in providing gas and electricity to domestic customers. These costs include:
- wholesale gas and electricity prices
- transmission and distribution network charges
- supplier operating and metering costs
- environmental and social policy levies
- a regulated allowance for supplier margins
Ofgem uses a forward-looking assessment of wholesale prices, based on a defined reference period, rather than spot market prices. This approach is designed to smooth short-term volatility and provide greater predictability for both consumers and suppliers. Industry analysts say the expected reduction in April is largely driven by:
- lower wholesale energy prices compared with the peaks recorded during the 2022 energy crisis
- changes to the way certain policy costs are recovered
- the continued effect of government intervention that sits outside the structure of household bills
The role of government support in reducing bills
A central factor behind the scale of the projected savings is the government-backed energy bill discount scheme. Unlike earlier emergency measures, the scheme is funded through general taxation, rather than being recovered directly through energy bills.
According to official figures, the programme involves £6.9bn of public spending over three years, covering the period from 2026 to 2029. By shifting part of the cost burden away from energy bills, the scheme reduces the level at which the price cap needs to be set. This approach means that part of the support households receive is reflected indirectly through lower capped prices, rather than appearing as a separate line item on bills.
What households are expected to pay in 2026
Based on current projections, analysts estimate that the typical annual energy bill in 2026 will be around £1,645, using standard consumption assumptions applied by the regulator. This level would be:
- more than £200 lower than in 2024, when household bills reflected the phased withdrawal of emergency energy support measures
- well below the peak levels recorded during the energy crisis, when typical annual bills rose above £3,000, even after government intervention
Although bills at this level remain higher than the long-term average seen before 2020, the April 2026 adjustment would represent the first sustained reduction in household energy costs since the period of elevated prices began. The estimates refer to an average household and do not reflect individual usage patterns, which continue to be the primary determinant of total energy spending.
How savings will be distributed across households
Analysis by the Resolution Foundation indicates that the impact of the April price cap reduction will vary significantly depending on household income, energy consumption and housing characteristics.
Its modelling suggests that the average household will receive support worth around £135 over the 2026–27 financial year, once the combined effect of the lower price cap and the government’s discount scheme is taken into account. The analysis also indicates that approximately 6.8 million households are expected to save more than £200 a year as a result of the two measures operating together. These higher cash savings are more likely to be seen among households with greater energy consumption, as reductions in unit prices have a larger effect on total bills where usage is higher.
However, the modelling shows that lower-income households tend to benefit more in proportional terms, as energy costs account for a larger share of their overall expenditure. As a result, even smaller cash reductions can represent a more significant improvement in affordability for these households. The Resolution Foundation notes that individual outcomes will continue to depend on factors such as household size, property efficiency and heating systems, meaning that the scale of savings will vary across the population.
Why energy bills may rise again after April
Despite the short-term reduction expected from April 2026, analysts caution that underlying pressures on household energy costs remain. Several factors are expected to place upward pressure on bills over the medium term. These include rising network charges linked to investment in electricity grid upgrades, continued spending on low-carbon generation and infrastructure, and the gradual recovery of policy costs that were deferred during earlier periods of government support.
According to central projections published by the Resolution Foundation, average household energy bills could be only around £60 lower than current levels by March 2029, despite billions of pounds in public support over the period. The analysis highlights that many components of energy bills are structural in nature and are not directly determined by wholesale gas and electricity prices alone. As a result, short-term reductions linked to market movements may narrow over time unless the underlying cost structure changes.
The significance of 2029 for household energy bills
Analysts identify April 2029 as a potential turning point for household energy costs. At that point, the government’s current energy bill discount scheme is due to expire. If the support is not extended or replaced, households could see an immediate increase in their energy bills as costs currently covered through public spending are transferred back into regulated charges. According to estimates published by the Resolution Foundation, the withdrawal of the scheme could add around £55 a year to the average household energy bill. The organisation has said that decisions on how energy policy costs will be funded beyond 2029 will need to be communicated well in advance to provide certainty for households and suppliers.
Government position on energy affordability
The government says its stated aim is to improve energy affordability while reducing long-term exposure to volatile international fossil fuel markets. The Department for Energy Security and Net Zero has said that increasing the share of domestically produced, low-carbon electricity is intended to help stabilise household energy costs over time by reducing reliance on imported fuels. Ministers have also acknowledged that investment in generation capacity, electricity networks and system resilience involves significant costs. These costs, they say, remain a structural part of the energy system and are ultimately reflected in consumer bills through regulated charges.
What the price cap does — and does not — do
It is important to note that the energy price cap does not guarantee that every household’s total bill will fall by the same amount, and it does not cap overall spending in pounds and pence. Instead, the cap limits:
- the unit prices suppliers can charge for gas and electricity
- the level of daily standing charges
Actual household bills continue to depend on several factors, including:
- total energy usage
- property size and energy efficiency
- heating systems and patterns of consumption
Households that use more gas and electricity than the typical consumption level assumed by Ofgem will continue to pay more in absolute terms, even when the cap is lower. Conversely, households that reduce consumption may see additional savings beyond the headline reduction delivered by the cap.
Ofgem is due to announce the new price cap level on 25 February 2026. Once confirmed, the revised unit rates and standing charges will apply from 1 April 2026, setting household energy costs for the spring and early summer period. For millions of households, the change will translate into lower bills following several years of elevated costs. At the same time, the outlook beyond 2026 continues to depend on longer-term decisions about infrastructure investment, government support and the funding of energy policy costs.
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