An average of £150 will be cut off the price of household energy bills from April 1 (Image: Getty)
UK households will receive “automatic” savings on their energy bills from April, despite soaring oil prices in the wake of conflict in the Middle East. US-Israeli strikes on Iran, followed by retaliatory strikes across the region, has caused global gas prices to spike this month, driving UK wholesale energy prices up by around 50%.
The conflict means it currently costs energy suppliers more to buy energy to supply to customers, which has prompted UK suppliers to pull a raft of fixed-price tariffs from the market, or reprice them at higher costs. According to data from price comparison website Uswitch, gas has risen by 30% to the highest level in more than three years, and as this plays a key role in electricity pricing, electricity costs are likely to go up as well.
But despite rising costs, the government has confirmed that an average of £150 will be cut off the price of household energy bills “automatically” from April, regardless of developments in the Middle East.
Read More: New £244 charges on flights to USA, Caribbean, Dubai and India from April
Read More: Households urged to follow ’30-minute laundry rule’ in March
The cut comes from the scrapping of the long-running Energy Company Obligation (Eco) scheme, introduced under the Tories, from next month, which will see the average household energy bill reduced by £150.
The government has confirmed the savings will be applied to bills from April 1 onwards, including to those on fixed tariffs, so households don’t need to do anything to claim the savings.
In an update on Tuesday (March 10), the Cabinet Office said: “We announced in the Autumn Budget that we would help people manage the cost of keeping their homes warm, including by taking an average of £150 off the costs of energy bills from April.
“The energy regulator Ofgem has now confirmed the energy price cap for April – which limits the amount customers on standard variable tariffs pay for each unit of gas and electricity – will fall by 7%.
“You do not need to do anything to claim the savings. These will be automatically applied to your bill from 1 April onwards, including to those on fixed tariffs.
“The energy price cap will provide protection for households until the start of July, regardless of developments in the Middle East.”
“The exact amount each household saves will depend on how much energy is used and the type of tariff.”
*** Ensure our latest personal finance headlines always appear at the top of your Google Search by making us a Preferred Source. Click here to activate or add us as Preferred Source in your Google search settings. ***
Energy bill savings from April will depend on how much energy they use and the type of tariff they’re on, but it is expected the average household will see their bill reduced by £150.
For households on standard variable tariffs, savings will be applied to unit rates for gas and electricity for any energy used after April 1, and energy suppliers will be in contact to confirm the details of the new rates.
For those on fixed tariffs, your tariff will be amended so that the savings are applied to your unit rates going forward, and energy suppliers will contact you to confirm the new rates.
Major UK energy suppliers, including British Gas, Octopus Energy, E.ON, OVO and EDF, have all confirmed plans to pass on savings to all customers from April.