Households across Great Britain are set to receive a significant reduction in their energy costs, with a confirmed £150 annual saving on bills starting from 1 April 2026.
How the £150 Energy Bill Saving Will Work
The saving will be applied automatically to all domestic customers, including those on both flexible and fixed-rate tariffs. Leading energy firms such as Octopus, British Gas, E.ON, EDF, and OVO have agreed to pass on the government-mandated reduction. This follows pressure from consumer advocates to ensure the benefit is universal and not limited to customers on standard variable tariffs.
Customers do not need to take any action to claim the discount. The reduction will be applied by adjusting the unit rates on all tariffs from the April start date, with the savings clearly visible on subsequent monthly statements.
Where the Savings Are Coming From
The bulk of the cut, approximately £92, results from a major change in how green energy subsidies are funded. The cost of the Renewables Obligation, which currently adds to domestic bills, will be slashed by 75% and instead be paid for through general taxation.
A further £62 will be saved per household due to the closure of the Energy Company Obligation (ECO) scheme in March 2026. While this cost was previously only charged by larger suppliers, the government has mandated that all domestic energy firms, including smaller providers like Fuse and Tulo, must pass on an equivalent level of saving. Ofgem states smaller firms may adjust other areas to create the same reduction for their customers.
Impact on the Price Cap and Household Budgets
These interventions, announced in the Autumn Budget, are expected to lead to a net reduction in energy costs for most users. Experts predict the overall effect will be a roughly 6% drop in the price cap compared to levels seen in January 2026.
This news provides welcome relief for households, ensuring that even those locked into fixed-term energy deals will see their bills fall. The coordinated move across the industry marks a significant step in the government's stated aim to reduce the cost of living.
