British Gas, Octopus Energy and EON have now all confirmed plans to pass on savings to all customers next year
Money Saving Expert Martin Lewis (Image: ITV)
Martin Lewis has issued an update about cuts to energy bills for customers across the UK next year. Chancellor Rachel Reeves announced in the Autumn Budget that people across the country will receive an average of £150 cuts to their energy bills from April next year.
The discount comes as the Labour Party is scrapping the ECO (Energy Company Obligation) scheme. The ECO is a government energy efficiency scheme which has been designed to tackle fuel poverty and help reduce carbon emissions.
The ECO scheme works by placing a Home Heating Cost Reduction Obligation (HHCRO) on medium and large energy suppliers. Under HHCRO, obligated suppliers must promote measures that improve the ability of low-income, fuel-poor and vulnerable households to heat their homes.
British Gas, Octopus Energy and EON have now all confirmed plans to pass on savings to all customers next year. On X, Martin Lewis wrote: “EON has joined Octopus and British Gas in saying it will pass on the full April 1 2026 cut in energy bills to all customers, including those on fixes.
“1. This is the £150 off average bills from the Budget, coming from shifting some policy costs off energy bills and onto general taxation, and cutting the ECO scheme.
“2. The cut to the price cap will be via a 3.5p/kWh (c.13%) reduction in electricity prices and a 0.35p/kWh (c.6%) reduction in gas prices, if everything else remains equal.”
The money saving expert continued: “3. Everything else is unlikely to remain equal, as the April price cap was expected to rise, so the actual pound-in-your-pocket cuts will be a little less than this. Currently, around a 6% reduction in April’s Price Cap over January’s is predicted.
“EON and Octopus have indicated this will be done by simply cutting all customers’ rates, including those on fixes, by this amount on 1 April. Updated: British Gas has now said it will also do it this way.”
Martin added the government told him it is “pushing all firms to follow suit”, he said the key for him is how the discounts will be implemented and making sure it is transparent. The finance expert believes a “a straight cut on all bills” on April 1 is the cleanest and best way to do it.
A fixed energy tariff means a household’s unit rates and standing charge stays the same for the length of the contract agreed with the supplier – which tend to be a year or longer.
Those on standard variable tariffs pay changing rates as wholesale market costs paid by the supplier go up or down and are not limited to a set time frame.
According to latest Ofgem figures, around 21m domestic customers’ energy accounts are on fixed tariffs, while around 34m remain on standard variable tariffs.
After the Budget, Ned Hammond, deputy director of customer policy at Energy UK, which represents suppliers, said: “So last week’s Budget announcement was very welcome and suppliers will of course look to pass on the savings.
“However, it’s also expected that there will be some new costs added to bills over the coming months.
“While most customers remain on the price cap, where the amount they pay for energy is set by Ofgem, suppliers also set their own fixed tariffs to compete on price with each other and so have every reason to pass on any cost savings with these.”
