Will your energy fix be reduced by the Budget's '£150 a year off bills' from 1 April 2026?

This is all about the changes announced in the Budget that the Government says will "cut £150/yr off average bills from 1 April" across England, Scotland and Wales.

Yet that statement from the Government was blunt. It did it in reference to the default Price Caps (for Direct Debit, prepayment and pay on receipt of bills), which two-thirds of homes are on, but what about the rest – the people who've done what they should and ditched the Price Cap for cheaper fixes and special tariffs?

I called the secretary of state for energy, Ed Miliband, within an hour of the end of the Budget, to push him on this, and he promised me he'd try and get firms to pass it on to all customers. The next day, I asked him on camera on my ITV Budget show (it's at 10 mins 24secs in). Now, finally, that pushing seems to be paying off, let me take you through it...

1. This £150 year off average bills from the Budget, is mostly from shifting 75% of the cost of the Renewables Obligation policy off energy bills on 1 April 2026 and onto general taxation, and also from cutting the ECO scheme at the end of March 2026.

2. The cut to the Price Cap will be via reducing unit rates, ie, the cost of each unit of energy you use. It is projected to be:
- Electricity: a 3.5p/kWh inc VAT (c.13% off Jan Price Cap) reduction.
- Gas: a 0.35p/kWh inc VAT (c.6% off Jan Price Cap ) reduction.
... if everything else remains equal.

3. Yet, everything else is unlikely to remain equal, as the April Price Cap was expected to rise without this Budget announcement, so the actual pound-in-your-pocket cuts will be a little less than the above, yet still significant. Currently, factoring everything in, around a 6% reduction in April's Price Cap over January's is predicted.

4. What I've been pushing for, is for all energy companies to do this by simply reducing the unit rate on all their tariffs on 1 April by the amounts above. That way we can clearly see the discount has been applied and by the whole amount. The table below shows whether firms have agreed to that or the more loose 'we'll pass on all the cut' (or nothing at all).

5. The Government has told me it is pushing all firms to follow suit, as it should. The key for me, though, is how it will be implemented and making sure it is transparent and consistent across firms.

One method some firms have discussed is that when they launch a new fix before 1 April, they say they will incorporate the Budget cut in the fix's price from day one of the fix (or incorporate the ECO cut element from day one) by calculating the pro-rated savings they'd make after 31 March.

This worries me. It isn't transparent – we can't see any change. How do we know they've done it and not just priced higher knowing this? It also makes comparisons difficult if some firms reduce prices on 1 April and some won't. That's why I'm pushing the 'do it on 1 April' route.

6. A final area we're still in the dark on (ironically) is time-of-use tariffs. It's simply too early to know how they’ll factor the discount in on those (firms haven't got that far yet). However, the MSE team and I will be monitoring this nearer the date to check if it's fair and loudly state if we think it isn't.

7. Of course, many would've preferred this discount to be off Standing Charges; that way it's a flat saving for everyone. It's something I pushed for pre-Budget. That hasn't happened, but there is also a consultation on cutting c.£39 off Standing Charges by shifting the cost of the Warm Home Discount onto the unit rate on 1 April too.

If that happens, it will lower Standing Charges and increase the unit rate (though that increase would be less than the saving due to this, so the unit rate would still drop in total) – but overall, average costs will remain the same.