What Does the Autumn Budget Mean for Your Energy Bills?
The UK Autumn Budget announces changes to energy levies that will reduce household bills by an average of £150 from April 2026. DESNZ details how shifts in ECO and RO funding deliver these savings for typical households.
Direct answer
The Autumn Budget will cut average UK household energy bills by £150 per year from 1 April 2026 by ending ECO funding on bills after 31 March 2026 and shifting 75% of RO costs to general taxation for three years. This equates to £134 off Ofgem's typical dual-fuel price cap. Confirmed by DESNZ for households on default tariffs.
What’s happening
The Autumn Budget, as outlined by DESNZ, announces measures to reduce household energy costs. Key changes include ending the Energy Company Obligation (ECO) levy after 31 March 2026 and shifting 75% of Renewables Obligation (RO) costs from electricity bills to general taxation for three years starting 1 April 2026. These steps aim to cut living costs, with the Warm Home Discount expanding to reach up to 6 million low-income households with a £150 payment.
What this means for household energy bills
Billpayers will see an average reduction of around £150 in annual energy costs from April 2026. For Ofgem's 'typical' dual-fuel medium household, this equals £134 off the price cap, broken down as £24.80/MWh off electricity from RO, £8.91/MWh off electricity from ECO, and £3.15/MWh off gas from ECO. Savings vary by usage:
| Household type | Annual usage (elec/gas MWh) | Estimated saving |
|---|---|---|
| High demand rural, poor efficiency | 3/30 | £205 |
| Gas-heated with medical equipment | 4/25 | £224 |
| Low demand flat, 1-2 people | 1.8/7.5 | £88 |
While ECO's end removes bill levies, it impacts funding for fuel-poor home upgrades. RO relief is temporary, lasting three years.
Who is affected
These changes apply to all Great Britain (England, Scotland and Wales) household energy bill payers, with savings passed through directly to customers on default tariffs under the Ofgem price cap. Dual-fuel customers see the full impact, with higher savings for greater electricity or gas users. The expanded Warm Home Discount means around six million low-income households will receive the £150 rebate.
What you can do now
- Check if you qualify for the £150 Warm Home Discount via your supplier or DESNZ guidance.
- Review your tariff: fixed deals may beat the price cap post-April 2026.
- Compare switches easily with Taupia, a free service that scans bills across 19+ providers.
- Track usage to estimate your exact saving using the table above.
- Contact your supplier for bill forecasts incorporating these changes.
Key takeaways
- Average household energy bills fall by £150/year from April 2026 due to ECO end and 75% RO shift to taxes.
- Savings vary: £88 for low-use flats, up to £224 for high-demand rural homes.
- Warm Home Discount expands to 6 million poorest households with £150 each.
- Impacts all UK bill payers, especially price-capped households.
- Check eligibility and compare tariffs to maximise benefits.