Government issues UK energy bills price update and plans for £150 April boost | Personal Finance | Finance

The government has issued an update on energy prices in the UK and its plans to cut bills by £150 from April amid ongoing conflict in the Middle East.

US-Israeli strikes on Iran, followed by retaliatory strikes across the region, this week has caused global gas prices to spike, driving UK wholesale energy prices up by around 50%. The conflict means that 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 so they’re more expensive. According to data from price comparison website Uswitch, the number of fixed deals has more than halved since last weekend, while those remaining have gone up in price, meaning customers now have fewer options to switch and save.

The Department for Energy Security and Net Zero (DESNZ) has issued an update on the impact of the Middle East conflict on energy bills in the UK, including its pledge to cut household energy bills by £150 from next month.

Chancellor Rachel Reeves announced in the autumn Budget that £150 would be cut from the average household bill from April 1 as a long-running energy efficiency programme introduced by the Tories is scrapped.

Ms Reeves described the Energy Company Obligation (Eco) scheme introduced under the Conservative government as a “failed” scheme, claiming it had cost households £1.7 billion per year on their bills, and by scrapping it, the average household will instead see their bill reduced by £150 in 2026.

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, meaning a reduction in household energy bills.

In an update this week, the DESNZ confirmed there has been no change to these plans amid the ongoing Middle East conflict, so households will start to see savings from April.

The DESNZ said: “We announced in the Autumn Budget that we would cut the cost of living, including by taking an average of £150 of costs off energy bills from April. This will help millions of families with their energy bills.

“This change comes on top of the expansion of the Warm Home Discount – a £150 discount off electricity bills for eligible households – part of a wider package of cost of living measures.”

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As for UK energy prices, the government said the energy price cap will provide protection for households until the start of July, regardless of developments in the Middle East.

The DESNZ added: “This is the maximum rate you can be charged by your energy company for default tariffs – and as a result of government action in the Budget, the price cap will fall by 7% or £117 annually for the period covering April to June. So, households will see their energy bills go down in April.

“However, the biggest driver of energy prices for homes and businesses is the cost of wholesale gas set by international markets. If this remains high, it could have an impact on bills in the future. This means that moving to clean, secure, homegrown power is the best way to protect bills for good.”