After years of the cost of living crisis hitting hard, energy bills have been a strain on many household budgets. Winter hasn’t just meant chilly weather, it’s brought that dreaded internal debate about whether to switch the heating on or simply accept life as a walking ice cube. You might even have contemplated with the idea of taking up candle making, not for the cosy aesthetics, but just to keep the lights on. The good news? While we can’t promise an end to the rain anytime soon, some much needed support is finally on the way.
From 1 April 2026, most UK households will see their annual energy bills drop by around £117 on average.
How the saving works
The saving comes from two key changes announced in the Autumn Budget 2025:
- Energy Company Obligation (ECO) This charge funds home insulation and energy efficiency schemes through energy bills. It ends on 31 March 2026.
- Renewables Obligation (RO) This subsidy for renewable energy will shift to general taxation, with 75% of the cost no longer appearing on energy bills.
Together, these changes cut the “policy cost” portion of your energy prices. Ofgem will reflect this in a lower energy price cap from April 2026.
Who will see the savings
Households on variable price-cap tariffs
If you’re on a variable tariff covered by Ofgem’s price cap, your supplier will automatically reduce your per unit rates from April–June 2026.
Many fixed tariff customers
Several major suppliers have already confirmed they’ll pass the savings on to customers on fixed deals from April 2026. The Government has urged suppliers to apply the reductions, so most fixed tariff customers should benefit too.
The savings apply to both gas and electricity. However, most of the reduction will show up in electricity unit rates, since that’s where most policy costs currently sit.
Who might not receive the full saving
Some smaller suppliers and specialist tariffs didn’t previously pass certain policy costs onto customers, either because they were exempt or structured their pricing differently.
Since most smaller firms didn’t pay ECO under the old system, they have less to remove from bills now, therefore their customers may see a smaller reduction than £117. But, if you’re with one of these suppliers, you may already be on a comparatively competitive deal.
Do you need to do anything?
If your supplier includes policy costs in your tariff, you should see lower unit rates automatically from around 1 April 2026.
If you’re unsure, take these steps:
- Contact your supplier and ask how and when they’ll apply the savings to your tariff.
- If you’re on an older fixed deal, confirm whether your price will update in April.
If you run into problems with your energy supplier, our rights guides can help. You can also raise a case or contact us at support@resolver.co.uk
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