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

Typical energy bills will fall by £117 a year in April, regulator Ofgem has announced, following a shake-up in charges by the government.

Nearly everyone in England, Wales and Scotland will benefit from a cut irrespective of their tariff, although the amounts will vary between households.

For millions of households on variable tariffs governed by the price cap, the drop will be about £10 a month for those using a typical amount of gas and electricity.

However, prices still remain relatively high by historical standards, debts have ballooned, and billpayers are being urged to shop around for further savings.

The 7% fall in the price cap is the largest seen since last summer.

Domestic gas and electricity bills are a complicated mix of charges for energy policy, costs to run the network, as well as the price of gas and electricity to run a home.

In November's Budget, Chancellor Rachel Reeves announced changes to the first of these - policy costs.

She said the typical annual household energy bill would fall by £150, by scrapping the Energy Company Obligation (Eco) scheme introduced by the Conservatives in government, and also moving some charges onto general taxation.

However, the cost of maintaining and strengthening energy networks - including power lines, cables and gas pipes - is rising.

For a household governed by Ofgem's price cap, and using a typical amount of energy, the annual bill will fall by £117 to £1,641.

Crucially, the discount on each household's individual energy bill will depend on the size and type of household and how much energy it uses.

The reduction will be primarily applied through a lower price per unit of electricity used. This means high electricity users, which may include vulnerable households with medical equipment, are likely to see the biggest benefit. Those who use little electricity and a lot of gas will benefit the least.

However, the changes to policy costs will also mean a reduction in bills for those on fixed deals. They will be contacted by their supplier with details in the coming weeks on the specific change to their tariff.