What is happening to gas and electricity prices?

Typical household energy costs will fall on 1 April 2026 when the new energy price cap takes effect, after a change to the way charges are calculated.

It follows a government pledge in the Budget to remove some costs from annual energy bills, and means a typical household will save around £117.

However, the cost of maintaining the energy network's infrastructure has gone up, which means households will save less than the government initially suggested.

What is the energy cap and how is it changing?

It fixes the maximum amount customers can be charged for each unit of gas and electricity on a standard - or default - variable tariff for a typical dual-fuel household which pays by direct debit.

Actual bills depend on the amount of energy used.

That is a fall of £117 a year, or 7%, from the previous cap which applied between January to March. However prices are still about a third higher than they were before the war in Ukraine.

During the three-month period, gas prices are capped at 5.74p per kilowatt hour (kWh) and electricity at 24.67p per kWh.

Ofgem regulates the energy market in England, Scotland and Wales. Northern Ireland has a separate system.

The energy cap will change again on 27 May 2026.

What is a typical household?

The price cap sets the unit prices for gas and electricity, but your household's actual bill depends on the overall amount you use, and how you pay for it.

The type of property you live in, how energy efficient it is, how many people live there and the weather all make a difference.

The Ofgem cap is based on a "typical household" using 11,500 kWh of gas and 2,700 kWh of electricity a year with a single bill for gas and electricity, settled by direct debit.

The vast majority of people pay their bill this way to help spread payments across the year. Those who pay every three months by cash or cheque are charged more.

How has the way energy bills are calculated changed?

From 1 April, charges related to the insulation scheme - called the Energy Company Obligation - will be scrapped, and for three years, renewable energy projects will be 75%-funded by general taxation instead of a levy on energy bills.

Prior to the changes, energy bills in England, Scotland and Wales included additional charges to help fund insulation for low-income households, and subsidise green energy projects such as wind farms and solar panels.

Nearly everyone in England, Wales and Scotland will benefit from this cut whichever energy tariff they are on, although the amounts will vary between households.

However, at the same, the cost of maintaining and strengthening energy network infrastructure like power lines, cables and gas pipes is rising.

It said this will strengthen the energy supply, and better shield customers from volatile energy prices. It will also reduce Britain's dependence on gas.

Customers will pay part of the cost of the upgrade, through an additional £108 added to energy bills by 2031.

These charges will also start to appear from April 2026, adding about £6 a month to the bill for a typical household covered by the energy cap.

That means that although Reeves had initially said the changes would take £150 off average annual dual-fuel bills, typical households will actually save £117.

Should I take a meter reading when the energy cap changes?

Submitting a meter reading when the cap changes means you are not charged for estimated usage at the wrong rate.

This is especially important when prices go up.

Customers with working smart meters do not need to submit a reading as their bill is calculated automatically.

What is happening to prepayment customers?

About six million households have prepayment meters, according to the latest Ofgem figures.

Prepayment customers were previously charged more than those who settle their bill by direct debit, but now pay the same after the latest move to align what prepayment and Direct Debit customers pay.

Between 1 April and 30 June 2026, the typical annual bill for prepayment customers will be £1,597, down from £1,711 between January and March.

Many pre-payment meters have been in place for years, but some were installed more recently after customers struggled to pay higher bills.

Rules introduced in November 2023 mean suppliers must give customers more opportunity to clear their debts before switching them to a meter. They cannot be installed at all in certain households.

What are standing charges and how are they changing?

Ofgem also controls standing charges, which are a fixed daily fee to cover the costs of connecting households to gas and electricity supplies. These vary slightly by region.

Between 1 April and 30 June 2026, standing charges will typically be 57.21p a day for electricity and 29.09p a day for gas.

Campaigners have long argued that standing charges are unfair because they make up a bigger proportion of the bill of low energy users.

In response, Ofgem said it wants all energy firms to offer at least one tariff that has a low standing charge but higher cost per unit of energy.

The regulator said this would give some customers more choice and control, but acknowledged it would not be suitable for everyone.

Charities, campaigners and the suppliers' trade body criticised the proposal for just shifting the cost from one part of the bill to another rather than cutting it.

Can I fix my energy prices?

Fixed-price deals are not affected by the energy price cap, which changes every three months and can rise and fall.

They offer certainty for a set period - often a year, or longer - but if energy prices drop when you are on the deal, you could be stuck at a higher price. You may also have to pay a penalty to leave a fixed deal early if you change your mind.

Ofgem, the energy regulator, says customers who want the security of knowing what their bill will be should consider moving to a fixed deal. However, it says they should make sure they understand all the costs.

Martin Lewis, founder of Money Saving Expert, recommends checking whole-of-market energy price comparison sites to help find the best deal.

What help can I get with energy bills?

The data also showed that more than one million households had no arrangement to repay their debt, another record high.

Suppliers must offer customers affordable payment plans or repayment holidays if necessary. Most also offer hardship grants.

The scheme could see up to £500m knocked off the £4.4bn currently owed to suppliers. But covering the cost will require an extra £5 being added to everyone's gas and electricity bill.

A number of existing government schemes also help people on low incomes with their energy bills.

The Household Support Fund, which was introduced in September 2021 to help vulnerable customers, has been extended until March 2026.

The discount will be applied automatically for people in England or Wales and some in Scotland. However, those on a low income in Scotland will need to apply via their energy supplier. Letters are being sent to people with information on the discount.

The Fuel Direct Scheme lets people repay an energy debt directly from their benefit payments.

About nine million pensioners will also get the Winter Fuel Payment in 2025/2026, worth £200 or £300, after a government U-turn over eligibility.