April 2026 Price Cap

In the Autumn Budget, it was announced that residents could expect an energy bill reduction of £150 on average, and Ofgem have just announced the new price cap. From 1 April 2026, the price cap will reduce by 7%, which is the largest reduction we have seen since July last year. However, unlike last July, this price cap decrease does not follow a huge increase.

This price cap decrease will see the average annual bill sit at £1641/year from the current £1758/year. Actual energy bills will vary depending on usage, but this gives an idea of how much someone could expect to save on the new rates. Although it isn’t quite at the £150/yr mentioned in the Autumn Budget, it is still an average decrease of £117, and brings the price cap down to the lowest we have seen in over three years.

The price cap varies by payment type and region. Below lays out the price cap changes for The Midlands depending on payment type.

Direct debit

People on direct debit will see their electric standing charge capped at 59.72p and their gas standing charge capped at 29.11p. This means that a household that has both gas and electric, will pay 88.83p per day from 1 April, which is only a decrease of 0.36p from the current price cap as, although the gas standing charge has decreased, the electricity standing charge has gone up.

The main savings we will see are on the unit rates as electricity will decrease by 3.1p (to 23.89p) per unit, whilst gas will decrease by 0.2p (to 5.69p). Although gas isn’t going down by as much as electricity, as we move into spring and early summer, residents are likely to use their gas a lot less.

Pre-payment meter

People on pre-payment meter will also have their electric standing charge capped at 59.72p and their gas standing charge capped at 29.11p. This means that a household that has both gas and electric, will pay 88.83p per day from 1 April, which is only a decrease of 0.36p from the current price cap as, although the gas standing charge has decreased, the electricity standing charge has gone up.

People on pre-payment meter, which still currently has the lowest unit rates, will see the cap for their electric unit rate drop to 23.72p (a 2.43p decrease) and their gas unit rate drop to 5.46p (down by 0.17p).

On receipt of bill

On receipt of bill, also known as standard credit, remains the most expensive method of payment. The standing charge has risen to 68.36p for electricity and will be changing to 36.72p per day for gas. Although the gas standing charge has decreased, this means that dual-fuel households will remain over the pound-a-day line and will be paying 105.08p which is only 0.05p per day less than the current rate. Over the next 3-month period (before the price cap changes again on 1 July), this will see on receipt of bill households paying a total of over £14 more on their standing charge than direct debit or pre-payment customers.

The unit rate is also highest for customers paying on receipt of bill. The capped unit rate for electricity will decrease to 25.22p (down by 3.26p), whilst the gas unit rate follows the same trend as the other payment methods and will decrease slightly to 5.99p (from 6.16p). Although these changes are in line with other payment methods, the electric unit rate is still 1.33p more than for direct debit customers and 1.5p more than customers on a pre-payment meter.

Overall, it is amazing to see the energy bills dropping and, with longer days and warmer nights on the horizon, this may give many residents some breathing room over the summer months with much lower energy bills. However, fuel poverty isn’t just about energy rates; it’s also about high usage. The UK still has a huge issue with its housing stock, with thousands of homes lacking basic insulation and reliable heating systems, which means that many vulnerable residents still aren’t able to take control of their energy usage.

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