UK households will see their annual energy bills fall by approximately £117 in April, bringing the typical bill to £1,641, following changes to energy policy announced in November’s Budget. The reduction, confirmed by analysts at Cornwall Insight, stems from Chancellor Rachel Reeves’ decision to scrap the Energy Company Obligation (Eco) scheme and shift some associated costs onto general taxation.
The Eco scheme, originally implemented by the Conservative government, placed obligations on energy suppliers to fund energy efficiency measures for homes. Reeves’ changes aim to alleviate pressure on household bills by removing these policy costs. However, the anticipated savings are tempered by rising costs associated with maintaining and upgrading the UK’s energy networks – including power lines, cables, and gas pipes.
The announcement of the new energy price cap is scheduled for 07:00 GMT on Wednesday. While Cornwall Insight forecasts a drop to £1,641, this figure represents a slight decrease from a similar fall experienced last summer, with prices having subsequently increased.
The £150 reduction initially pledged by Reeves has been subject to scrutiny. The Institute for Fiscal Studies (IFS) has questioned the effectiveness of the policy, examining whether the savings will fully materialize for consumers.
The changes to energy policy represent a key component of the Chancellor’s 2025 Budget. The Guardian has published a summary of the budget’s key points, highlighting the government’s focus on easing the cost-of-living crisis through targeted measures like the energy bill reduction.
