WILL GAS AND ELECTRICITY BILLS FALL IN 2026? ENERGY PRICE FORECAST REVEALED 🔥

Energy bills for most households in England, Scotland and Wales are set to fall by 7% – equivalent to £117 a year – from 1 April when the latest energy price cap comes into play.

Millions of households will see some reduction in their costs following the energy bills saving announcement made by the government in the Autumn Budget.

Ofgem, the energy regulator, sets a new energy price cap every quarter.

While the April price cap level is already set, war in the Middle East means bills could skyrocket in the summer if the current disruption to the fuel supply continues.

We look at where energy prices are forecast to go in the next price cap period, and further into 2026.

Why are energy bills set to come down?

Energy bills are falling from 1 April following measures announced by the government in its 2025 Autumn Budget.

Certain green levies are being removed from household bills from April onwards as the vast majority of the costs associated will be shifted into general taxation.

With these costs removed from energy bills, the government estimates the average household will be £150 better off per year.

However, Ofgem have said that this fall will be partially offset by an increase in the cost of running the UK’s energy infrastructure, which will increase bills by around £66 a year.

Overall, the April price cap will be £117 lower than the January cap thanks to the changes.

Prime minister Sir Keir Starmer said: “Energy bills [are] coming down by £117. For millions of families and young people struggling, that’s guaranteed money off bills in April, driven by the action that this Labour government has taken.

“We promised to cut the cost of living, we are cutting the cost of living.”

The government says the majority of households in the UK will benefit from the £150 bill drop, with the savings applying to all tariff types, including: variable tariffs, fixed tariffs, tracker tariffs and time-of-use tariffs.

Energy consultancy Cornwall Insight said the price cap would have risen in April by as much as £57 had the government not intervened.

While this price drop will be welcomed by households, it is only a small saving. The average energy bill remains above £1,500 a year – much more than was the norm before the 2022 energy crisis.

What are the new energy unit prices?

Energy bills will fall by 7% from 1 April. It means the average household on a dual-fuel tariff (which covers gas and electricity) paying by direct debit will pay £1,641 a year during Q2, down from £1,758 a year currently.

The price cap, which affects around 33 million households, is a limit on unit prices, not your total bills, so your actual bill will be determined by the amount of energy you use.

The current price cap energy unit prices and those for April to June 2026 can be found below:

Source: Ofgem

Where will energy prices go in 2026?

Ofgem will confirm the next price cap, covering the July to September period, by 27 May.

Following the US and Israeli strikes on Iran, and the subsequent disruption to the global energy supply chain, forecasts for the July price cap are now far more uncertain.

Consultants at Cornwall Insight, which is well-regarded for the accuracy of its price cap predictions, have predicted that the July price cap could jump 10% higher than the April level due to the war in the Middle East.

They now expect the July cap could come in at £1,801 per year for a typical dual-tariff household paying by direct debit, £160 higher than in April.

Before the current conflict, Cornwall Insight expected the July price cap to rise slightly to £1,645 from £1,641 in April.

The revision comes as wholesale gas prices have increased sharply since 28 February, when the first strikes were fired on Iran by the US and Israel.

This immediate price rise reflects the overall surge in global gas markets, with the UK being particularly exposed as it is a net importer of fuel used for household energy, the consultancy said.

However, such a sharp rise may not come to fruition, depending on the length of the conflict in the Middle East, and the scale of disruption to the UK’s energy supply.

Cornwall Insight said Ofgem will base the final July price cap figure on average wholesale prices over a three-month period.

That means if gas prices stay elevated for a longer period of time, the price cap will likely increase. Conversely, if prices return to normal quickly, the impact of the war on energy bills may be lessened.

If Cornwall Insight’s prediction turns out to be correct, the rise will be significant, but the damage will be far smaller than the shock triggered by Russia’s invasion of Ukraine in 2022.

Dr Craig Lowrey, principal consultant at Cornwall Insight, said: “This latest forecast puts the role of wholesale markets firmly back in the spotlight and illustrates how exposed UK households remain to international market movements.

“While the rise is eye‑catching, any immediate concern should be tempered. We are still early in the assessment period for the July cap, and what happens in the energy markets over the next three months will be the key factor, rather than this spike alone.”

Other forecasters also now expect the price cap to rise following the war in the Middle East.

EDF Energy now thinks the price cap will rise £65 on 1 July, from £1,641 to £1,706. This prediction comes in £71 above their previous prediction.

They then expect prices to rise again in October, to £1,725, and start 2027 at £1,737.

Meanwhile, British Gas expects the cap to rise by £69 in July to £1,710, fall slightly in October to £1,705, and rise again at the start of 2027 to £1,715.

You should take these predictions with a pinch of salt, however, as it is very difficult to accurately forecast where energy prices will go so far in the future. That is particularly the case now as predicting the impact of war on energy prices is even more difficult.

Looking much further into the future, energy bills are expected to stay relatively high over the next five years to fund a £28 billion investment in the energy network.

Energy firms were given the green light to upgrade power and gas grids in December 2025, but households will have to pay for it through their bills.

Ofgem said household electricity and gas bills will rise by a net of £30 per year by 2031. This factors in any savings that will be made by consumers due to the upgrades.

The regulator said it would hold firms to account for delivering upgrades on time and on budget.

How to get help with paying your energy bills

If you’re struggling to afford your energy bills, your energy supplier may offer support with hardship grants. Octopus Energy has Octo Assist and British Gas has the British Gas Energy Trust.

You may be able to get a repayment holiday. This is where you ask your supplier to pause your repayments for a short amount of time to give you some breathing space.

Another option is to agree to an affordable payment plan. You will pay fixed amounts over a set period of time, which will cover what you owe plus an amount for your current use.

If you are on benefits, you might be able to repay your debt directly from your benefits through the Fuel Direct Scheme.

According to Citizens Advice, the Fuel Direct Scheme can be a good option if you can’t agree on a plan to pay back your debt, and it’s usually better than getting a prepayment meter.

Additionally, some government schemes give some households money towards paying their energy bills.

The Warm Home Discount is offered to households in receipt of some means-tested benefits who use participating energy suppliers and provides £150 of credit that is automatically paid towards your energy bill.

Meanwhile, if you are a pensioner with an income of £35,000 or less, you will be eligible for the Winter Fuel Payment, which provides retirees with up to £300 each winter.

To help you keep energy bills low, we have gathered some top tips in our article looking at 14 ways to reduce your energy costs.

What’s happening with standing charges?

From 1 April, standing charges, what you pay to cover the cost of maintaining the energy network, will fall for households.

The Warm Home Discount scheme is currently funded by consumers through their gas and electricity standing charges, but these will now be moved to unit rates instead.

This means if you use more energy, theoretically this change could impact you more, although the government has said for a typical dual-fuel household there will be no obvious change in energy bills.