Domestic energy bills to fall in April 2026

Posted Feb 25, 2026 Updated Feb 25, 2026

By Watt's the Point

2 min read

Ofgem has announced that energy bills will fall from 1 April to 30 June 2026 under the latest quarterly energy price cap update for households across England, Scotland and Wales.

For a typical household that uses gas and electricity and pays by Direct Debit, bills will drop by £117, or 7%. Typical annual bills are expected to fall to £1,641. Compared with April to June 2025, that’s £208, or 11%, lower.

The price cap limits the maximum that energy suppliers can charge per unit of energy and for the daily standing charge. This means your total bill is tied to how much energy you use, where you live and how you pay.

From April, households on standard variable (default) tariffs paying by Direct Debit will pay on average (including 5% VAT):

24.67p per kWh for electricity, with a daily standing charge of 57.21p
5.74p per kWh for gas, with a daily standing charge of 29.09p

It is expected that there will be a drop in both standard and variable rate tariffs.

Why are prices changing?

Prices are changing due to the government shifting policy costs out of energy bills. Funding for the Energy Company Obligation (ECO) scheme will be scrapped. This scheme obligated large energy suppliers to provide funding for home energy efficiency improvements. Additionally, for the next 3 years, 75% of the cost of the Renewable Obligation (RO) scheme will be funded through general taxation. The government stated that this should reduce bills by an average of around £150.

Global wholesale energy prices have fallen over the past three months, cutting around £38 from annual costs. However, not all costs are falling. Network costs are increasing by around £66 a year under the RIIO-3 price control framework, which focuses on investing in and upgrading the UK’s energy infrastructure to improve long-term reliability and stability.

There is also a change to how the Warm Home Discount is recovered. From April 2026, these costs will move from the standing charge into the unit rate.

For reference, Figure 1 displays the approximate energy bill cost composition based on the January 2026 price cap. Policy costs were associated with approximately 13.4% of the total costs, whereas wholesale energy was associated with 39.3%, and infrastructure accounted for 22.6%.

Figure 1. Cost allocation of typical energy bill based on the January 2026 price cap.