Financial expert Martin Lewis has delivered a welcome pre-Christmas boost to UK households, confirming significant savings on energy bills are on the way for 2026.
Budget Announcement Fuels Bill Reductions
Chancellor Rachel Reeves used the Autumn Budget to announce that British consumers will see an average cut of £150 to their energy bills starting from April 2026. This saving stems from two key government decisions: shifting some policy costs from energy bills onto general taxation, and scrapping the Energy Company Obligation (ECO) scheme.
The ECO scheme was alleged to have added £1.7 billion per year to nationwide energy costs. Its removal is a central pillar of the planned financial relief for bill-payers.
Major Suppliers Commit to Passing On Savings
In a significant move for consumers, three of the UK's largest energy suppliers have now pledged to pass the full saving on to their customers. British Gas, Octopus Energy, and EON have all confirmed their plans for next year.
Taking to social media platform X, Martin Lewis provided a detailed breakdown. He explained that the cut to the energy price cap will be implemented through a 3.5p per kWh reduction in electricity prices (approximately 13%) and a 0.35p per kWh reduction in gas prices (approximately 6%), assuming other market factors remain constant.
Lewis noted, however, that "everything else is unlikely to remain equal", as the April price cap was previously expected to rise. Consequently, the actual reduction compared to the anticipated January cap is forecast to be around 6%.
Implementation and Transparency Key for Consumers
The method of applying these savings has been a point of discussion. EON and Octopus indicated they would implement the change by simply cutting all customers’ rates, including those on fixed tariffs, on 1 April 2026. British Gas has since confirmed it will follow the same approach.
Martin Lewis emphasised the importance of clear implementation, stating the government is pushing all firms to follow suit. "The key for me, though, is how it will be implemented and making sure it is transparent. I believe a straight cut on all bills on 1 April is the cleanest and best way to do it," he wrote.
E.ON Next released a firm statement: "When these savings start in April, we’ll pass them on in full to all our customers. No ifs. No buts. No small print. People are under pressure, and they deserve to feel the benefit directly on their bills."
A spokesperson for British Gas added: "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."
This collective action from major suppliers ensures that millions of households, regardless of their tariff type, will directly benefit from the government's policy change, providing a measurable reduction in living costs from spring 2026.
