Household energy bills to fall in April after charges shake-up

Following a shake-up in charges by the government, typical household electricity bills will decline by 7% in April.

Regardless of their tariff, nearly everyone in England, Wales, and Scotland will benefit from a cut, although the exact amounts will differ between households.

For millions of households on variable tariffs governed by the price cap, the decrease would be around £10 per month for those using a standard amount of gas and electricity.

However, prices are still about a third higher than they were before the war in Ukraine, debt has increased, and billpayers are being encouraged to shop elsewhere for more savings.

The 7% decline in the price cap is the biggest decrease since last summer. Although the government promised a £150 per year cut in April, the cost of running the electricity network is rising, resulting in a smaller saving of £117 per household using a typical amount of electricity.

How bills work

Domestic gas and electricity bills are a complicated mixture of charges for energy policy, maintenance, and the cost of gas and electric power to run a house. Chancellor Rachel Reeves announced changes to policy costs in November's Budget. The typical household electricity bill would decrease by £150, according to her, by scrapping the Government Obligation (Eco) scheme and moving some charges to general taxation.

However, the cost of maintaining and improving electricity networks, including power lines, cables, and gas pipes, is on the rise for a typical household, diluting the savings. The annual bill for a household governed by Ofgem's price cap, which uses a standard amount of electricity, will decrease by £117 to £1,641. The price cap would have risen in April without the government intervention. The cap is based on a typical household who uses 11,500 kWh of gas and 2,700 kWh in electricity a year, with a single bill for gas and electricity settled by direct debit.

Energy bills are at the forefront of everybody's thoughts, and I suspect they've been too high for too long,

Prime Minister Sir Keir Starmer said. I promised to bring bills down, and I meant it.

I know there's more to do and my government is taking every lever to bring down the cost of living and keep the pound in working people's pockets.

However, Labour shadow energy minister Claire Coutinho said Labour was "pulling the wool over people's eyes by removing some costs from your electricity bill and putting them directly into your tax bill.

Savings will vary

The discount on each household's individual energy bill will vary based on the size and type of household and the household' s individual electricity bill, as well as how much energy it uses. It would be mainly funded by a lower price per unit of electricity used. This means that high electricity users, which may include elderly households with medical equipment, are likely to see the greatest benefit. Many that use little electricity and a lot of gas will prosper the least. However, the reforms to policy will result in a decrease in bills for those on fixed contracts.

In the coming weeks, they will be contacted by their supplier regarding the specific change to their tariff. Around 40% of households are on fixed contracts. Ofgem reported that it had enforcement powers if suppliers refused to pass on savings to these customers. The decline, according to Tim Jarvis, director general of markets at Ofgem, was welcome news for many households. We're already seeing signs of increased involvement and competition, with switching up by more than 20% year on year.

he said. The wholesale cost of gas, which increased after Russia's takeover of Ukraine four years ago and resulted in soaring household bills, remains highly volatile and difficult to predict. This makes it difficult to predict what will happen to domestic energy bills later this year, but energy consultants Cornwall Insight is forecasting relatively little more change as the year goes on.

This cut in the cap will bring real relief to households after a long period of stress on their electricity bills. However, the company's early view for July shows that this is where the big falls will stop occurring. To keep costs low, experts have urged people to track their electricity use to keep costs down. Eileen Jordan, a woman from Ripon, North Yorkshire, said she and her husband had worked hard to keep up with everything. They did not heat two bedrooms in their house, according to the BBC's Your Voice, but their finances were in good shape. 'How some people cope is beyond my comprehension,' she said.

We are fortunate, but only because we have been frugal.

While electricity bills will decrease in April, other bills will rise, meaning that the majority of people will continue to face a squeeze in the cost of living. In some states, water bills will rise sharply, council tax will rise, and other household costs will rise. If the two-child benefit cap is scrapped, several wealthy families will receive more universal credit. Households that are trying to make ends meet have fallen behind on energy payments, resulting in a collective debt to suppliers that is much more than £4 billion. Companies can assist, according to Dhara Vyas, chief executive of Energy UK, which represents suppliers.

They are giving them different tariffs, extra help, and assistance, but they can only do this if they know who is in your household and what your family's circumstances are,

she said. In April, we released our flagship newsletter with all the headlines you need to start the day. For those on the price cap, in specific terms. Sign up here.