The upcoming month of April will witness a decrease in energy costs following the recent announcement by Ofgem regarding a new energy price cap. From April 1, 2026, the average dual fuel household is expected to pay £1,641 annually for energy, down from the previous cap set on January 1, 2026, which stood at £1,758.
While this figure represents the typical household scenario, individuals can utilize their current bills to gauge the expected changes through an interactive calculator. The price cap dictates the maximum permissible charges for unit rates and standing charges, which means individual bills may vary around the set price cap.
In gas, the average unit rate is set to decrease from 5.93p per kilowatt hour (kWh) to 5.74p per kWh, with the standing charge dropping from 35.09p per day to 29.09p. On the electricity front, the average unit rate will go down from 27.69p per kWh to 24.67p per kWh, while the standing charge will see a slight increase from 54.75p per day to 57.21p per day.
Tim Jarvis, the Director General of Markets at Ofgem, expressed positivity towards the announcement, attributing the reduction in prices to the recent drop in wholesale energy costs and ongoing network investments. The change in policy costs, as declared in the budget by the Chancellor, played a significant role in driving down energy prices.
Jarvis emphasized Ofgem’s dedication to minimizing controllable costs and facilitating investments essential for transitioning to a more sustainable energy system in the long term. The surge in consumer engagement and competition, with a nearly 20% rise in switching rates, signifies a growing trend towards time-of-use tariffs and a wider array of energy products offering savings on specific timeframes.
While the price cap safeguards consumers from excessive energy expenses, it is considered a safety net. Consumers on fixed deals saved an average of around £115 below the cap last year. Ofgem encourages consumers to engage with their suppliers to explore various tariff options and payment methods that could potentially lower their energy bills further.
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