Changes to policy costs will also benefit those on fixed deals
Regulator Ofgem has announced that standard energy bills will fall by £117 a year in April after a shake-up in charges by the government.
Nearly every household in England, Wales, and Scotland will benefit from a cut irrespective of their tariff, although the amounts will vary between households, according to The BBC.
For millions of households on variable tariffs governed by the price cap, the drop will be about £10 a month for those using an average amount of gas and electricity.
However, prices will remain relatively high by historical standards,
The 7% fall in the price cap is the largest seen since last summer.
Domestic gas and electricity bills are a complex combination of charges, including energy policy fees, the costs of operating the network, and the actual price of gas and electricity used in the home.
In November’s Budget, Chancellor Rachel Reeves unveiled changes to the first component, policy costs. She stated that the typical household energy bill would drop by £150 annually, thanks to the removal of the Conservative-era Energy Company Obligation (ECO) scheme and the shift of certain charges onto general taxation.
However, the cost of maintaining and strengthening energy networks, such as 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.
The ‘discount’ on each household’s individual energy bill will, however, depend on the size of your household and, subsequently, how much energy it uses.
Most of the savings will come from a lower price per unit of electricity. As a result, households that use a lot of electricity, including some vulnerable homes with medical equipment, are likely to see the greatest savings, while those that use little electricity but more gas will benefit the least.
Important to note is that 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
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