The upcoming decrease in energy prices starting this April has been confirmed by Ofgem through the announcement of a new energy price cap. From April 1, 2026, the average dual fuel household is expected to pay £1,641 annually, a reduction from the previous cap set on January 1, 2026, which was £1,758.
Individual households can use their current energy bills to estimate the impact of the price change by utilizing an interactive calculator. The price cap determines the maximum allowable charges for unit rates and standing charges, meaning actual bills may vary from the cap amount.
Gas prices are set to decrease, with the average unit rate dropping from 5.93p per kilowatt hour (kWh) to 5.74p per kWh, and the standing charge decreasing from 35.09p per day to 29.09p. For electricity, the average unit rate is also falling from 27.69p per kWh to 24.67p per kWh, while the standing charge is increasing from 54.75p per day to 57.21p per day.
Director General, Markets at Ofgem, Tim Jarvis, expressed that the price drop is a positive development driven by lower wholesale energy prices and strategic investments in the energy network. The reduction is primarily attributed to changes in policy costs as announced in the recent budget.
Jarvis emphasized Ofgem’s commitment to managing controllable costs and facilitating investments to ensure a more resilient energy system in the long term. The increase in consumer engagement and competition, evidenced by a nearly 20% rise in switching rates, reflects a growing preference for time-of-use tariffs and diverse product offerings from suppliers.
While the price cap offers protection against overpaying for energy, Jarvis highlighted that consumers on fixed deals saved around £115 on average compared to the cap last year. He encouraged consumers to explore different tariff options and payment methods with their suppliers to potentially reduce their energy bills further.