Household energy bills are forecast to fall by around £117 from April, as government policy changes outweigh modest increases in wholesale prices.
Energy consultancy Cornwall Insight predicts that the Ofgem price cap will drop 7 per cent to £1,641 a year for a typical dual-fuel household when it is reset on 1 April.
The forecast reduction is slightly smaller than Cornwall Insight’s previous estimate of an 8 per cent, or £138, cut, reflecting a recent uptick in wholesale energy prices. Ofgem is due to confirm the official cap level by 25 February for the period running to 30 June.
The projected fall follows measures announced in last November’s budget by Rachel Reeves, including the scrapping of the Energy Company Obligation scheme. Cornwall Insight estimates these policy changes will reduce the cap by about £145 a year once VAT and pricing allowances are factored in.
However, higher network charges, linked to the operation and maintenance of Britain’s energy infrastructure, have offset part of the saving.
Wholesale gas prices have been volatile in recent weeks due to geopolitical tensions, but remain below the levels seen when the January price cap was set. Cornwall Insight expects bills to remain “relatively steady” through the rest of 2026, with only a modest increase forecast in July.
Craig Lowrey, principal consultant at Cornwall Insight, said: “Any reduction in bills is positive, especially at a time when affordability matters. The fall in policy costs is doing most of the heavy lifting, and while wholesale prices have been in the headlines, their impact on April’s bills is limited.”
He cautioned that keeping bills down would be challenging as the UK invests in modernising its energy networks and reducing reliance on imported gas. “There needs to be an honest conversation that the transition to a more secure energy system won’t be cost free,” he said.
A spokesperson for the Department for Energy Security and Net Zero said the government was delivering on its promise to cut average household costs by £150 from April.
Comparison site Uswitch said all households would see adjustments to bills regardless of supplier or tariff type. However, it stressed that savings would depend on individual consumption levels, with higher-usage households seeing larger reductions.
Simon Francis of the End Fuel Poverty Coalition urged consumers to look beyond the headline average figure and examine unit rates and standing charges when the final cap is announced.
While the projected drop offers short-term relief, analysts warn that structural pressures on the energy system mean long-term stability remains far from guaranteed.
