Family power payments are forecast to fall by round £117 from April, as authorities coverage modifications outweigh modest will increase in wholesale costs.
Vitality consultancy Cornwall Perception predicts that the Ofgem value cap will drop 7 per cent to £1,641 a 12 months for a typical dual-fuel family when it’s reset on 1 April.
The forecast discount is barely smaller than Cornwall Perception’s earlier estimate of an 8 per cent, or £138, reduce, reflecting a current uptick in wholesale power costs. Ofgem is because of affirm the official cap degree by 25 February for the interval working to 30 June.
The projected fall follows measures introduced in final November’s finances by Rachel Reeves, together with the scrapping of the Vitality Firm Obligation scheme. Cornwall Perception estimates these coverage modifications will cut back the cap by about £145 a 12 months as soon as VAT and pricing allowances are factored in.
Nevertheless, larger community fees, linked to the operation and upkeep of Britain’s power infrastructure, have offset a part of the saving.
Wholesale gasoline costs have been unstable in current weeks on account of geopolitical tensions, however stay beneath the degrees seen when the January value cap was set. Cornwall Perception expects payments to stay “comparatively regular” via the remainder of 2026, with solely a modest enhance forecast in July.
Craig Lowrey, principal advisor at Cornwall Perception, mentioned: “Any discount in payments is constructive, particularly at a time when affordability issues. The autumn in coverage prices is doing a lot of the heavy lifting, and whereas wholesale costs have been within the headlines, their impression on April’s payments is restricted.”
He cautioned that retaining payments down could be difficult because the UK invests in modernising its power networks and decreasing reliance on imported gasoline. “There must be an sincere dialog that the transition to a safer power system received’t be price free,” he mentioned.
A spokesperson for the Division for Vitality Safety and Web Zero mentioned the federal government was delivering on its promise to chop common family prices by £150 from April.
Comparability website Uswitch mentioned all households would see changes to payments no matter provider or tariff sort. Nevertheless, it burdened that financial savings would rely upon particular person consumption ranges, with higher-usage households seeing bigger reductions.
Simon Francis of the Finish Gas Poverty Coalition urged customers to look past the headline common determine and study unit charges and standing fees when the ultimate cap is introduced.
Whereas the projected drop gives short-term reduction, analysts warn that structural pressures on the power system imply long-term stability stays removed from assured.
