Domestic gas and electricity bills are a complicated mix of charges for energy policy, costs to run the network, and the price of gas and electricity to run a home.
In November’s Budget, Chancellor Rachel Reeves announced changes to policy costs.
She said the typical annual household energy bill would fall by £150, by scrapping the Energy Company Obligation (Eco) scheme introduced by the Conservatives, and moving some charges onto general taxation.
However, the cost of maintaining and strengthening energy networks – including power lines, cables and gas pipes – is rising by about £6 a month for a typical household, diluting the saving.
For a household governed by Ofgem’s price cap, using a typical amount of energy, the annual bill will fall by £117 to £1,641. Without the government intervention, the price cap would have risen in April.
The 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.