Average energy bills are set to be slashed by £150 a year from April following decisions by the Chancellor to help save on household costsRichard Guttridge Agenda Editor and Gary Stewart Weekend editor
15:30, 11 Jan 2026
Chancellor Rachel Reeves(Image: Getty Images)
Millions of households across the country are in line for welcome financial relief come 2026. Average energy bills are expected to drop by £150 annually following measures introduced by Chancellor Rachel Reeves aimed at easing the burden on household budgets.
Leading energy providers including British Gas, Octopus and Eon have all pledged to pass these reductions on to customers, whether they’re on variable or fixed-rate tariffs. The move will mean millions of homes paying less for their gas and electricity supplies, reports Birmingham Live.
While bills will edge up marginally from January – by approximately £3 annually – meaningful savings are anticipated to kick in from April onwards.
The announcement comes after five years marked by relentless cost of living challenges for families.
The Budget outlined reforms to how energy charges will be calculated for households going forward.
Crucially, those who’ve locked into fixed-rate deals to avoid soaring prices will also see the benefits, according to suppliers.
Richard Neudegg, director of regulation at Uswitch, commented: “Households can now confidently sign up with these suppliers for a fixed deal that will effectively save them money twice.
“They can secure cheaper rates now during the coldest months of winter, and they’ll see their prices drop even further in April without having to take any further action.
“Prime Minister Keir Starmer has pledged that 2026 will mark the year when British families begin experiencing tangible improvements to their finances as Labour’s policies take effect.
In his New Year statement, he declared: “In 2026, the choices we’ve made will mean more people will begin to feel positive change in your bills, your communities and your health service.
“”But even more people will feel once again a sense of hope, a belief that things can and will get better, feel that the promise of renewal can become a reality, and my government will make it that reality. “
“More police on the streets by March. Energy bills down and the number of new health hubs up in April. More funding for local communities. And with that change, decline will be reversed. “.