Energy price cap falls in April but electricity standing charges creep higher AGAIN

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The energy price cap will fall by £117 in April as the impact of government policies feeds through to prices, but households will pay more in standing charges.

Ofgem said the cap will fall by 7 per cent or around £10 a month, from £1,758 a month to £1,641 for a typical dual fuel household.

Electricity prices will fall from 26.69p/kWH to 24.67p/kWH, while the price of gas will increase to 5.74p/kWH, from 3.93/kWH. 

Wholesale energy prices have gone down by £38 a year, Ofgem said, while costs related to the Warm Home Discount have been shifted from standing charges to the unit rate.  

In the Budget last autumn, Rachel Reeves announced plans to shift 75 per cent of the Renewables Obligation costs from household energy bills into general taxation, and the decision not to extend the Energy Company Obligation (ECO) beyond March 2026.

Good news: The average energy bill will fall from April but the daily fixed fees keep rising

Expert forecaster Cornwall Insight last week said the policy changes will reduce the cap by around £145, but higher standing charges mean bills are higher than they should be.

While wholesale prices have come down, standing charges continue to creep higher. 

Ofgem today announced that electricity standing charges will increase from 54.75p to 57.21p per day, while gas fees fall to 29.09p from 35.09p as the unit raise increases. 

This Is Money analysis shows standing charges have nearly tripled since the introduction of the price cap, from roughly 28p for both gas and electricity to over 80p since January 2019.

How to save on your bills

Some energy firms are offering savings of over £200 if you fix your energy bill, which should offer significant savings even with the price cap falling.

Ofgem director general Tim Jarvis has been urging customers to move to a fixed deal. 

He said: 'The price cap protects households from overpaying for energy, but it’s a safety net. 

'Last year, consumers on fixed deals paid around £115 less than the cap on average, so we’d encourage people to speak to their supplier about the options available and consider whether a different tariff or payment method could help bring their bills down further.'

Customers who switch to a fixed deal can save an average of £260 a year, according to Uswitch.

Fuse Energy is offering a 13-month deal with an average annual bill of £1,498, saving £260 against the current price cap, and £143 against April’s.