Millions of British households are set for a significant reduction in their energy costs, with suppliers confirming they will pass on substantial government savings. From 1st April 2026, the typical annual energy bill is expected to fall by around £134.
Major Suppliers Pledge to Pass on Savings
In a major shift from standard industry practice, leading energy firms have committed to applying the upcoming reduction in policy costs to all their customers. British Gas has explicitly stated it will pass the savings to everyone, including those locked into fixed-term contracts.
A spokesperson for British Gas said: "We welcome the Government's steps to ease energy costs as we've called for these levies to be moved into general taxation for some time. We'll of course ensure all our customers benefit – including those on fixed-term tariffs."
Ending the 'Postcode Lottery' for Fixed Deals
Historically, changes to government policy costs have created a uneven landscape for consumers. Savings could take time to filter through, and customers on fixed-price deals often missed out entirely because their rate was contractually locked.
Octopus Energy has joined British Gas in promising to break this pattern. Its founder and CEO, Greg Jackson, stated: "Octopus has long called for cuts in policy costs to help bring bills down... These changes will bring a welcome relief to customers, and we’ll pass them through on all of our tariffs as soon as they kick in, so no one misses out." He added that the process would be automatic for Octopus customers.
Pressure on Other Energy Firms
The move by British Gas and Octopus Energy establishes a new benchmark for customer fairness. The commitment places immediate pressure on rival suppliers—including EDF, EON NEXT, Scottish Power, and OVO—to follow suit and ensure all their customers receive the same financial relief.
The savings stem from new government policies, led by the Labour Party, which will remove certain legacy costs and green levies from energy bills. The industry has broadly supported this shift towards funding such initiatives through general taxation instead.
This coordinated action signals a significant win for consumers, guaranteeing that the promised £134 reduction will reach households regardless of their tariff type when the changes take effect in April 2026.
