Ofgem price cap change: what it means for your energy bill

Ofgem has cut the energy price cap by £117, lowering the typical annual dual-fuel bill to £1,641 from 1 April; the change reflects a government pledge to reduce average household bills by £150 through shifting some renewable costs onto general taxation.

Ofgem has announced a £117 reduction to the energy price cap, taking effect from 1 April and bringing the typical annual dual-fuel bill to £1,641. The price cap sets maximum per-unit charges and a daily standing charge for gas and electricity and was introduced in 2019. The change follows a government commitment to cut average household bills by £150. That commitment is being implemented largely by moving 75% of Renewables Obligation costs onto general taxation and ending the Energy Company Obligation. Key facts: - The price cap falls by £117, effective 1 April, to a typical annual dual-fuel bill of £1,641. - The cap limits unit rates and the standing charge in England, Scotland and Wales; Northern Ireland is regulated separately. - The government is shifting 75% of Renewables Obligation costs to general taxation and has scrapped the Energy Company Obligation, with most savings applied through lower electricity unit rates. - The advertised £150 cut is an average; actual changes will vary by household size, type and energy use. - Increases in network operation and maintenance costs have offset part of the savings passed to customers. - Suppliers are expected to send details of new unit rates, and consumer groups have warned that some fixed tariffs may not immediately reflect the cut. Summary: Households on standard or cap-linked charges can expect lower average bills from April, though individual impacts will differ based on usage and tariff. Suppliers will provide new rate information soon, and market forecasts currently expect the cap to remain relatively steady through 2026 with a possible small fall in July, while wholesale prices and future policy announcements could change that outlook.