How will the government discount reduce my energy bills?
Energy price cap and government discount FAQs: What the April 2026 change means for you
From 1 April 2026, energy bills will go down for most households across the UK following action from the UK Government and a new price cap set by Ofgem.
Here’s what you need to know.
What is the energy price cap, and what’s changing?
Ofgem sets the energy price cap. It limits the unit rates and standing charges suppliers can charge on standard variable tariffs. From 1 April 2026, the cap will be £1,641 a year for a typical household paying by Direct Debit. This includes the Government discount. Your actual bill will depend on how much energy you use.
Why are bills going down?
The Government has reduced the policy costs included in energy bills. Suppliers are passing this on through lower unit rates from 1 April. Some suppliers were already exempt from certain costs, so savings will vary.
For customers on standard and tracker tariffs without this support, bills may have gone up as these tariffs are impacted by wholesale and network costs.
What are wholesale and network costs?
Think of your energy bill like online groceries: suppliers pay the “food” (wholesale energy) and the “delivery” (network costs); these prices are set by others, not your supplier.
Is this the Government’s £150 off energy bills?
Yes. This is the Government’s “£150 off bills”.
Suppliers apply this as lower unit rates, not a one-off payment. This means:
Your saving depends on how much energy you use
Higher users will save more
Lower users will save less
Do I need to do anything?
No. You’ll see the new lower rates automatically from 1 April. You don’t need to contact anyone or fill in anything. You’ll see the savings through cheaper unit rates, not a separate credit on your bill.
What happens if I’m on a standard variable tariff?
You’ll automatically pay the new lower rates from 1 April.
What happens if I’m on a tracker tariff?
Your prices will also go down from 1 April. Our tracker tariffs follow the price cap, so the reduction will apply automatically.
What happens if I’m on a fixed tariff?
If you’re already on one of our fixed tariffs, you’ll still get the discount automatically on 1 April. When you’re looking at fixed deals, quotes may sometimes show pre-discount rates, so the prices could look higher.
How do the savings work on Time of Use tariffs?
If you’re on a Time of Use tariff, where electricity costs vary depending on the time of day. The Government discount will be applied to all rates, not just peak or off-peak. This means you’ll see lower prices whether you use electricity during the day or overnight.
Will everyone save the same amount?
No. Your saving depends on:
How much energy you use
Your tariff
Your home
The more energy you use, the bigger the saving.
What does the £1,641 figure mean?
This is the average annual cost used by Ofgem for a typical household using gas and electricity and paying by Direct Debit on a standard tariff. Most households will pay more or less than this depending on their usage.
The bottom line: Energy prices are going down from 1 April, and you don’t need to do anything to benefit. Your supplier will apply the discount automatically, and you’ll see the saving through lower unit rates. Some suppliers were already exempt from these costs, so customers with these suppliers will not see a change in their unit rates due to the government discount.