London, Feb 25, 2026, 10:07 GMT
- Ofgem is lowering the household energy price cap by 7% for April through June, bringing it down to £1,641 a year for a typical dual-fuel customer paying by direct debit.
- According to the regulator, policy costs dropped steeply, but network charges climbed as grid upgrades began to show up in the numbers.
- Charities and consumer advocates argue the recent drop isn’t enough—many households are still struggling with high bills.
Britain’s energy regulator Ofgem plans to trim its household energy price cap by 7% starting April 1, pulling the typical annual dual-fuel bill down to £1,641. That’s a yearly drop of £117—roughly £10 a month. Tim Jarvis at Ofgem called a budget tweak to policy costs “the main driver.” The regulator also flagged a jump in switching activity, up nearly 20% year-on-year, and noted last year’s fixed deals came in about £115 beneath the cap. (Ofgem)
The reduction comes just as new government rules around environmental and social charges kick in from April, with Ofgem putting the average customer saving at £150. According to Ofgem, global wholesale prices dropped, shaving off £38 a year in the last quarter; but network charges climbed by £66 annually, thanks to the RIIO-3 price-control regime that covers upgrades to electricity and gas networks. (Ofgem)
The cap sets a ceiling for what suppliers can charge per energy unit and for the standing charge—the daily fixed fee—facing standard variable (default) tariff customers in England, Scotland and Wales. There’s no cap on total bills since those depend on usage. As of April 1, the average direct-debit unit rate drops to 24.67p per kilowatt hour for electricity, 5.74p for gas. The standing charge for electricity bumps up to 57.21p a day, while gas drops to 29.09p. According to Ofgem, policy costs within the cap fall to £106 from £236, but network costs jump to £463 from £397. The regulator’s next cap announcement comes May 27. (Ofgem)
“I promised to bring bills down and I meant it,” Prime Minister Keir Starmer said in a statement, urging additional steps on the cost of living. The government pointed to its recent budget move, which eliminated the Energy Company Obligation scheme and cut an average £150 from bills. Ministers are set to call in major suppliers to discuss making sure those savings reach consumers. (GOV.UK)
The government plans to move 75% of the Renewables Obligation cost—used to support renewable energy—from consumer bills to general taxation starting in April. According to Reuters, network charges have climbed as costs tied to a £24 billion transmission system overhaul begin to show up, while the new cap still sits roughly 30% higher than in the winter of 2021/22. “Bills remain hundreds of pounds above pre-crisis levels,” said Simon Francis at the End Fuel Poverty Coalition. Reuters added the cap, launched in 2019, now applies to around two-thirds of UK households. (Reuters)
National Energy Action acknowledged the reduction will offer some relief, but plenty are still facing hardship. “Any fall in sky-high energy bills is welcome,” said director Peter Smith. Over at Citizens Advice, chief executive Clare Moriarty called energy bills “an ongoing threat to their financial stability” for many. (The Guardian)
Wholesale prices have come down, Jarvis noted, though he warned consumers aren’t out of the woods—wholesale costs still drive most of the cap’s formula, leaving households vulnerable to gas market swings. Ofgem is telling customers: review fixed deals, look at other payment options ahead of the new quarter.
Rivalry between suppliers is heating up, with more households now eyeing time‑of‑use tariffs—these offer cheaper electricity rates during off‑peak hours. But the cap adjustment doesn’t guarantee immediate savings for all: homes locked into fixed deals could notice smaller or slower shifts, depending on how each supplier handles policy-cost reductions.
The cap resets quarterly, so if wholesale prices tick up, or if network costs keep rising as Britain upgrades its grids for electrification, it could head higher again. Plus, lower unit rates offer little relief to households using a lot of energy—or those already behind on bills—unless they manage to cut back or find support.
Ofgem noted the cap for April through June is down by over £200 compared to last year. Still, the regulator points out the energy system is in flux, with changes in how bills are structured. The next price-cap update lands late May, offering the first indication if spring’s drop sticks around for summer.
