Households in Britain are set to see about £150 knocked off annual energy bills from April 2026, after the Autumn Budget shifted most Renewables Obligation costs into general taxation and confirmed the Energy Company Obligation will end on 31 March 2026. Ministers also expanded the £150 Warm Home Discount so up to six million households now receive it, with the Department for Energy Security and Net Zero publishing the changes on 27 November.

The Treasury says the saving is a rounded £154 per household: around £88 from moving 75% of the domestic share of the Renewables Obligation off bills, £59 from not renewing ECO, and roughly £7 from lower VAT tied to the policy change. The measures take effect on 1 April 2026. Treasury policy costings confirm the RO shift runs across the Spending Review period, with funding switching from bills to the Exchequer.

The impact will vary by usage. Using Ofgem’s typical consumption values, a ‘medium’ dual‑fuel home is set to save about £134 a year. A high‑use electric storage‑heated household could save around £442, while a low‑demand flat might see nearer £88. Government modelling says the changes will continue to influence bills for three years from April 2026.

Ofgem reminds consumers that the price cap is reviewed every three months, and the cap level still depends mainly on wholesale energy costs and network charges. For January–March 2026, Ofgem set the typical cap at £1,758, with wholesale energy making up about £690 of that total-close to 40%. Lower policy costs from April 2026 should trim bills even if global gas prices move around.

Fixed‑tariff customers are expected to benefit too. The government has told suppliers to pass the saving through from April 2026, with the change then rolling on for three years. Ofgem will confirm the cap for April–June 2026 in February 2026, which will set the context for how the policy saving shows up on bills.

Fairness is a core reason for moving charges off bills. Analysis by the Resolution Foundation finds that shifting environmental and social policy costs into general taxation would leave almost three in four families better off, with the poorest fifth saving around £110 a year after accounting for modest tax changes. Economists at the Institute for Fiscal Studies add that today’s mix over‑prices electricity relative to gas and argue for funding support via broader, more consistent taxation.

There are trade‑offs. Ending ECO removes a long‑standing retrofit programme from bills, prompting warnings from fuel poverty groups who fear a gap in home‑upgrade funding if Exchequer‑backed alternatives are not scaled quickly. Campaigners have urged ministers to pair the levy shift with robust, taxpayer‑funded insulation support so lower‑income households are not left behind.

From a climate point of view, rebalancing costs can speed electrification. Independent work for the MCS Foundation and Cornwall Insight suggests taking levies off electricity bills could save many electric‑heating homes £130–£300 a year and strengthen the case for heat pumps by narrowing the price gap with gas. Lower electricity costs mean cleaner heating becomes more affordable over time.

If you’re struggling now, you don’t need to wait. Check if you qualify for the Warm Home Discount, ask your supplier about support or debt plans, and consider joining the Priority Services Register for extra help. Ofgem’s guidance sets out these options, plus routes to insulation support where available.

Public finances matter too. Treasury tables show the RO shift costs the Exchequer around £2.6 billion in 2026–27, falling thereafter, which explains why ministers chose taxation to fund it. That approach is broadly supported by fairness evidence and, if paired with targeted retrofit grants, can cut bills now while improving homes for the long term.

Scale remains a challenge. National Energy Action estimates around six million UK households are in fuel poverty on the widely used 10% definition, underscoring why expanded bill support and sustained investment in energy‑efficient homes are both needed. The Budget measures help with bills; the next step is locking in warmer, lower‑carbon homes at pace.

Data note: Ofgem’s ‘typical’ medium home uses roughly 2,700 kWh of electricity and 11,500 kWh of gas a year. Savings in this article are the government’s averages; actual bill changes will depend on your tariff, region and usage once April 2026 rates are set.