If you’ve been confused by headlines about falling energy bills in 2026, you’re not alone.
Energy bills have dominated household budgets for years, but from April 2026, average UK energy bills are expected to fall. This change reflects adjustments in how renewable energy projects and insulation schemes are funded, rather than a sudden drop in energy prices.
If you’ve heard that energy bills are coming down in 2026, you’re not wrong — but the reasons behind it aren’t always clear. This guide explains what’s actually happening, why bills are falling now, and what it really means for households.
What’s actually happening to energy bills in 2026?
From April 2026, the government is removing some additional policy costs from household energy bills. These are charges that have historically been added to electricity bills to help fund renewable energy projects and home insulation schemes.
Rather than being paid for through household bills, these costs will instead be funded directly by the government. This change is designed to reduce the overall amount households pay for energy, without affecting the supply of electricity or gas.
Importantly, this isn’t the same as wholesale energy prices suddenly becoming cheaper. Instead, it reflects a change in how certain costs are collected and who pays for them.
In the Autumn Budget, the government said it would change how these schemes are paid for. From April 2026, ECO funding will end, and most of the remaining RO costs will be taken off energy bills. Instead, these costs will be paid through general taxation.
In simple terms, this means some of the policy-related charges added to household bills over the years will be removed. For the average household, this could mean savings of around £150 a year.
Energy prices will still fluctuate with wholesale costs and market conditions. But taking away these charges should make bills clearer and easier to plan for, without extra costs from policy changes.
According to the government and energy regulator Ofgem, these changes are expected to reduce average household bills by around £150 per year from April 2026.
This change is part of a wider effort to help lower the cost of living for working people.
These changes have been confirmed by the UK government and energy regulator Ofgem, who expect suppliers to pass the savings on to households from April 2026.
What this actually means for households
For households, the most important takeaway is that lower bills will be gradual, variable, and different for every home. Many renewable projects built over the past decade are now fully operational and no longer require the same level of financial support.
At the same time, the government has chosen to shift some energy-related costs away from household bills as part of wider efforts to ease cost-of-living pressures.
Savings won’t look exactly the same for everyone. The £150 figure is an average, not a guarantee, and how much you save will depend on how much energy you use over the year and the type of tariff you’re on. It also doesn’t mean energy prices are fixed for the long term.
The savings will be spread over the year rather than taken off one bill, so you’ll see slightly lower costs over time. Electricity bills are expected to see slightly larger reductions than gas bills, as more policy costs are being removed from electricity prices.
If you’re on a price-capped variable tariff, you should notice the changes from April, as the Budget changes feed into the energy price cap. Fixed tariffs may work a little differently, but the government expects suppliers to pass on the same savings, meaning rates should still come down from 1 April 2026 as suppliers adjust.
Lower bills don’t mean energy costs are ‘solved’
It’s great that bills are set to drop, but it’s not the whole answer. Energy prices don’t stay the same, and government support or wholesale costs can change too, which means bills will always have a degree of uncertainty. Homes that aren’t well insulated or still rely on older, less efficient heating systems tend to lose heat quickly, so even when prices drop, they can still end up using more energy just to stay comfortable.
This is why how we use energy at home is just as important as the price. Many households are already looking at everyday changes that help reduce waste and improve comfort, such as adjusting heating routines and cutting unnecessary energy use (link to Daily Energy Saving Habits to Cut Bills & Save Money).
Improving efficiency does not always require major renovations; often, simple actions like heating rooms only when in use or tailoring heating to your daily routine can make a significant difference. Over time, these changes improve comfort, efficiency, and lower costs.
How households can stay in control beyond 2026
Even as bills drop in 2026, relying on government funding changes alone won’t keep bills low forever. To continue benefitting from these savings and maintain lower costs, the most effective way is to focus on what you can control at home.
Even small adjustments at home, when paired with the coming reduction in energy bills, can add up over time to make a real difference.
- Improving insulation is simple and effective. Loft, wall, and floor insulation, plus draft-proofing, keep heat inside and reduce energy needed for comfort.
- Smarter heating controls provide precision. Scheduling heating avoids warming empty rooms and ensures comfort when needed. Pairing controls with timers can further reduce wasted heat.
- Heating rooms only when used is easy. Turn off heaters in unused areas, or keep bedrooms cooler during the day, to save energy without sacrificing comfort.
- Finally, understanding your electricity use can reveal savings, like turning off unused appliances or running machines at off-peak times.
These steps, with efficient heating, give households control over bills, boost comfort, and help homes align with a greener energy system.
Small changes and the right heating setup can make a real difference over time.
Looking ahead: why flexibility matters
As the energy system evolves, flexibility becomes essential.
Electric heating lets you warm your home in a more customisable way than many traditional systems. With room-by-room control, you can heat only the rooms you are using when you need them. When you heat rooms based on how you actually live, energy use becomes more efficient, especially if some spaces aren’t used every day. The long-term benefit is better control over running costs, without your home feeling any less comfortable.
As the country invests more in cleaner electricity, electric heating fits the future. It works with renewable energy, smart meters, and time-based tariffs, giving households more ways to use energy. As the grid turns greener, so does home heating, with no need to switch systems again.
Relying less on fossil fuels like gas helps lower emissions and stabilizes energy supplies. Gas prices fluctuate with global events, while electricity is increasingly UK-produced, benefiting from renewables.
For households thinking longer-term, electric heating can offer a more flexible and future-ready way to stay in control as the energy landscape shifts.
Conclusion
A £150 annual bill drop is welcome news, easing pressure and making costs easier to manage.
That said, it’s not the whole picture. Taking simple steps to understand your home’s energy use and making manageable changes will always bring added benefits, making future savings and comfort possible.
How we can help
If you’d like to understand how your home could become more energy efficient over time, Fischer offers free home heating surveys to help homeowners explore their options in a calm, practical way — with no obligation and no pressure.
Tom is passionate about showing people how modern electric heating, like Fischer Future Heat systems, can bring comfort, control, and long-term savings to their homes — without the jargon.
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