When will household energy prices fall by 7pc, as Ofgem notifies?

LONDON: Household energy prices in the UK are set to fall by 7 per cent from April 1, following an announcement by Ofgem. However, the regulator noted that the reduction may not benefit all households equally across the country.

Tim Jarvis, Director General at Ofgem, stated that the primary reason for the decrease is the government’s decision to reduce policy-related costs. He explained, “The main driver of today’s reduction is the change to policy costs announced by the Chancellor in the budget.”

The new energy price cap reflects measures outlined in last year’s budget, including shifting renewable energy costs to general taxation and scrapping schemes that required suppliers to fund energy efficiency improvements, such as insulation, for low-income households.

Under the revised cap, the average annual household energy bill will be approximately £1,641, representing a reduction of about £117 compared to the £1,758 cap set for January to March. However, this decrease is smaller than the previously promised £150 reduction.

The government had earlier announced plans to move 75 per cent of the Renewables Obligation costs, which support renewable energy generation, from consumer bills to general taxation starting in April. It also confirmed the removal of schemes requiring energy companies to finance heating and insulation upgrades for low-income households.