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Energy Bills Fall, But Standing Charges Soar
18 Feb
Summary
- Energy price cap forecast to fall by £117 to £1,641 from April 1, 2026.
- Electricity standing charges will increase by nearly 10p daily.
- Policy changes shift Renewables Obligation costs to general taxation.
Millions of households in England, Scotland, and Wales are set to experience a decrease in their energy bills beginning April 1, 2026. The energy price cap is projected to fall by approximately £117, from £1,758 to £1,641. This anticipated reduction is primarily attributed to policy measures announced in the Autumn Budget.
Key among these changes is the transfer of 75% of Renewables Obligation costs from household energy bills to general taxation. Additionally, the Energy Company Obligation (ECO) scheme will not be extended beyond March 2026. These policy shifts are expected to lower the cap by around £145 annually.
Despite the overall fall in the price cap, consumers will see an increase in their standing charges. Electricity standing charges are set to rise by nearly 10p per day, from 54.75p to 64p. Gas standing charges will also increase slightly. These higher charges for network operation and maintenance counteract some of the savings from policy changes.
Cornwall Insight forecasts that the energy price cap will remain relatively stable throughout 2026, with only a minor increase anticipated in July. Consumers on standard variable tariffs, which are controlled by the price cap and represent about 65% of homes, should monitor these changes. Experts suggest that opting for a fixed tariff could offer further savings, with many deals currently cheaper than the expected April price cap.
