Forecast Drop in UK Household Energy Price Cap to Save £138 Annually
Cornwall Insight forecasts that the Great Britain household energy price cap will fall by 8% in April, which would cut £138 from a typical annual dual-fuel bill. The predicted average gas and electricity bill would be around £1,620, down from the Ofgem cap set at £1,758 since 1 January, which represented a 0.2% rise.
This forecasted cap level would be the lowest in 18 months, since September 2024. Recent policy changes from the autumn budget have shifted some charges to general taxation, including ending the energy company obligation scheme and a 75% reduction in the renewables obligation. Despite this drop, household bills will remain higher due to £28 billion in grid upgrades expected by 2031, which could add about £108 per year.
Labour has proposed a policy aiming to reduce domestic bills by £300 by 2030 by shifting policy costs to taxation and incentivizing cleaner electricity use. The price cap is updated quarterly and influenced by wholesale gas prices and other policies, with key drivers being increased US gas supplies and a milder European winter.
It should be noted that the price cap does not cover Northern Ireland.
