Jasmine Birtles
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Energy Price Cap Cut Announced: Bills to Fall by 7% From April — What It Means for Your Household
Vicky Parry
25th Feb 2026
Energy bills are finally heading down. The new energy price cap has been confirmed today, bringing average household costs down by £117 a year from April. But how much will you actually save — and should you fix now?
The UK’s energy regulator, Ofgem, has confirmed that the energy price cap will fall by 7% from 1 April 2026.
For a typical household paying by Direct Debit on a standard variable tariff, that means:
- Current average annual bill: £1,758
- New average annual bill from April: £1,641
- Average saving: £117 per year (around £10 per month)
It’s welcome relief — but before we all breathe a sigh of relief, here’s what it actually means for your home and your wallet.
What Is the Energy Price Cap?
The energy price cap limits the maximum amount suppliers can charge per unit of gas and electricity on default tariffs.
It does not cap your total bill.
If you use more energy, you’ll still pay more. If you use less, you’ll pay less.
Around two-thirds of UK households are currently on standard variable tariffs, meaning most homes will see this reduction automatically from April.
What You’ll Pay From April 2026
Average rates (these vary slightly by region):
Electricity
- Around 24.67p per kWh
- Standing charge roughly 57p per day
Gas
- Around 5.74p per kWh
- Standing charge roughly 29p per day
If you’re on a fixed tariff, your price won’t change — but new fixed deals may become more competitive in the coming weeks.
Why Are Prices Falling?
The drop is largely due to:
- Lower wholesale energy prices
- Changes in how certain policy costs are collected
- Some green levies moving into general taxation
However, rising infrastructure and network costs continue to keep bills significantly higher than pre-crisis levels.
Are Energy Bills Now “Back to Normal”?
In short: no.
Even after this reduction, the typical household will still be paying hundreds of pounds more per year than before the energy crisis.
For many families already in energy debt or struggling with affordability, a £10-a-month saving won’t transform household finances — but it will help.
Should You Fix Your Energy Now?
This is where it gets interesting.
Some fixed tariffs are already pricing slightly below the new cap level. If wholesale prices remain stable, more competitive deals could appear.
Before switching:
- Check exit fees
- Compare against the new capped rate
- Consider how long you want price certainty
If you value stability and can secure a deal below the cap, fixing could make sense. But if prices continue to ease, staying flexible may pay off.
💡 MoneyMagpie Top Tips to Cut Your Energy Bill Further
Even with the cap falling, there are still savings to be made:
✔ Submit a meter reading around 1 April to avoid estimated higher charges
✔ Review your Direct Debit — you may be able to reduce it
✔ Bleed radiators and service your boiler to improve efficiency
✔ Switch to LED bulbs
✔ Check if you qualify for hardship grants or support schemes
✔ Compare fixed deals against the new cap
Small changes can often save more than the cap reduction itself.
The Bottom Line
Yes, bills are falling — and that’s good news.
But this isn’t a dramatic drop. Energy remains one of the biggest pressures on household budgets, and prices are still far above what many families would consider affordable.
The key now?
Stay proactive. Compare deals. Submit readings. And don’t assume the price cap means you’re automatically on the best tariff.
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