British households can expect their energy bills to drop by approximately seven per cent when Ofgem’s price cap undergoes its next revision in April, energy analysts have predicted.
Cornwall Insight forecasts that Ofgem will lower the energy price cap by £117, bringing annual bills for a typical dual fuel home down to £1,641 from 1 April.
This projection represents a slightly more modest decrease than the consultancy’s earlier estimate, which anticipated an eight per cent reduction worth £138.
The regulator is due to confirm the official cap level by February 25, covering the quarter running from April through to the end of June.
Ofgem price cap is projected to drop in April
|
GETTY
The reduction stems primarily from the Government’s decision to abolish the Energy Company Obligation (ECO) scheme, a Conservative-era initiative that Chancellor Rachel Reeves announced would be scrapped last November.
While the Chancellor pledged this would cut £150 from average bills, Cornwall Insight calculates the actual saving at roughly £145 once VAT and pricing allowances within the cap methodology are factored in.
However, rising costs linked to operating and maintaining Britain’s energy networks have eaten into some of these gains.
Wholesale energy prices have also edged upward since December, with gas costs proving particularly unpredictable due to “geopolitical factors”, according to the consultancy.
“Energy Owls” actively manage their energy usage, check tariffs, and track their bills. | Uswitch
Britons continues to grapple with the cost of living | GETTY
Craig Lowrey, principal consultant at Cornwall Insight, welcomed the forthcoming decrease, stating: “Any reduction in bills is positive, easing pressure at a time when affordability really matters.”
He noted that Government interventions cutting policy costs are “doing most of the heavy lifting”, with wholesale price fluctuations having minimal impact on April’s bills.
Yet Mr Lowrey cautioned that sustaining lower costs would prove difficult given the substantial investment required to upgrade energy infrastructure and reduce dependence on imported gas.
“The real test will be keeping those savings going,” he said, adding that building a more secure and resilient energy system “will not be cost free”.
Ofgem regularly changes the energy price cap every quarter | GETTY
A spokesperson for the Department for Energy Security and Net Zero confirmed the Government is “delivering on our promise to take an average of £150 of costs off bills from April 1”.
Uswitch noted that every household will experience bill adjustments from April, regardless of their supplier or whether they hold fixed or variable tariffs, though actual savings will depend on individual consumption levels.
Simon Francis, co-ordinator of the End Fuel Poverty Coalition, urged consumers to scrutinise unit costs and standing charges rather than headline figures when Ofgem makes its announcement.
Alastair Douglas, TotallyMoney CEO, added: “Experts have forecast that this April, the maximum amount energy providers can charge you will drop by £117 per year, to £1,641. Just remember that loyalty doesn’t pay, but changing suppliers can – and with some undercutting the price cap, you could save an extra £917 per year.”