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Energy price cap will fall by 7% from April – saving Brits £117 a year

ended 25. February 2026

Energy regulator Ofgem has today announced a 7% (or £117) reduction of the energy price cap for the period covering 1 April to 30 June 2026. 

This change amounts to a reduction of around £10 a month for the average household using both electricity and gas.  

For an average household paying by Direct Debit for gas and electricity, the overall bill will be £1,641 per year. Recent government budget interventions relating to policy costs are the main cause of this reduction.  

Today’s level marks a significant reduction in the cap level and is more than £200 lower than a year ago. This reflects the government’s decision to take £150 in policy costs off energy bills. 

Tim Jarvis, Director General, Markets, at Ofgem, said: “Today’s announcement will be welcome news for many households. Wholesale energy prices have fallen in recent months, and we’re investing in our network to safeguard the future energy system. The main driver of today’s reduction is the change to policy costs announced by the Chancellor in the budget."

He added: “The price cap protects households from overpaying for energy, but it’s a safety net. Last year, consumers on fixed deals paid around £115 less than the cap on average, so we’d encourage people to speak to their supplier about the options available and consider whether a different tariff or payment method could help bring their bills down further.”

  • What is your reaction to the annoucement?
  • Will energy prices coming down help your business? Or you personally?
  • Does it go far enough? We are still paying a huge amount on energy

Responses asap.

2 responses from the Newspage community

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Kate UnderwoodVerified
Founder & Chief People Strategist at Kate Underwood HR and Training
Ten quid a month off is nice, but it’s not the cavalry. Yes, a 7% drop helps UK SMEs with premises, kit, fridges, ovens and heaters. Any breathing space matters. It can ease cashflow and dial down the daily “turn it off!” wars.
But let’s be real: energy is still expensive. A cheaper punch in the face is still a punch in the face. And for your teams this is still a financial crisis. People are choosing which bill to pay, living in overdrafts, and panicking at every price rise. That stress walks into work. It shows up as sickness, mistakes, short fuses, and good staff leaving for a tiny pay bump because it feels like survival. Does it go far enough? No. Welcome news, but not a fix. One warning: don’t use this as an excuse to change hours, homeworking or perks without checking contracts and consulting. That’s how you turn savings into a tribunal headache.
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David BelleVerified
Founder and Trader at Fink Money
Most of the price cap cost is due to policy and grid updates to service ed Miliband’s Detroit’s energy policy.

It’s not there to serve people or businesses.

If we took a smart approach to the price cap, we would see energy as something we desperately need for growth, and therefore do everything we can to make it as cheap as possible, allowing the market to dictate lower prices.

Instead the government gets involved and ruins everything again.