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Annual energy bills will fall by £117 from April due to government changes, forecasters have predicted.
Measures announced in the budget will mean a drop to £1,641 a year for a typical dual‑fuel household, according to research firm Cornwall Insight.
That would represent a 7% fall from the £1,758 being paid until the end of the financial year in March, under the energy price cap.
If the forecast proves correct, annual bills will be at their lowest since July 2024.
The expected fall is down to government interventions, which are doing “most of the heavy lifting” to reduce costs, Cornwall Insight’s principal consultant Dr Craig Lowrey said.
Why?
As announced in the budget, some charges that had been part of bills are being removed and instead funded through general taxation.
Chancellor Rachel Reeves had said the government would reduce bills by £150 by cutting levies.
Money blog: Big drop in inflation announced – follow live
The Energy Company Obligation (ECO) scheme, designed to tackle fuel poverty and help reduce carbon emissions, has been scrapped, while the vast majority (75%) of renewables obligation costs are being removed from consumer energy bills, the research firm said.
But bills will not fall by the full amount that making those changes saves, as other charges associated with operating and maintaining energy networks have risen.
Not as steep a drop as first thought
The fall is also less steep than was first expected in December. Households were then forecast to experience the biggest price fall in two years, a £138 drop.
Volatility in wholesale gas markets amid geopolitical tension has changed this.
What is the energy…
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