Millions of households across Great Britain are set to receive a direct reduction in their energy bills, as the government confirms a major new policy. Chancellor Rachel Reeves announced in last week's Budget that from 1 April 2026, all homes in England, Scotland, and Wales will see their energy bills cut by an average of £150 a year.
Government Pressure on Energy Suppliers
Energy Secretary Ed Miliband has now written directly to energy companies to reinforce the policy. He stated that energy prices remain excessively high and that the government is acting decisively to ease financial pressure on families. In his letter, Miliband set out a clear expectation that every single penny of the government's intervention must be passed onto consumers.
This directive explicitly includes the significant portion of customers on existing fixed-term tariffs, who make up around 37% of the market. The government insists these households must benefit from the reduction, ensuring fairness across the board.
Consumer Champion Backs Move for Fixed Tariff Customers
The question of whether fixed-tariff customers would benefit was a major point of discussion following the Budget. Consumer champion Martin Lewis publicly questioned the Chancellor on ITV, asking if people on fixed rates next April would see their bills come down too.
In response, Ed Miliband affirmed the government's determination, stating: "We're determined that people feel the benefit, including those on fixed rates... We're determined to make sure that those benefits are passed on." Martin Lewis pledged to push the government hard on the issue, calling it "unthinkable" if savings weren't extended to fixed-tariff households. He warned that excluding them would be destructive and break consumer trust in the switching market.
Formal Commitment and Next Steps
The government's commitment is now formally documented. The official Budget document states: "We expect these savings to be passed on to customers on fixed tariffs from April 2026." Miliband has emphasised the vital partnership between the government, regulator Ofgem, and energy suppliers in navigating recent challenges and delivering this crucial support.
The policy does not apply to Northern Ireland, which has a separate energy market. The government urges continued collaboration with energy firms to ensure the positive changes reach every eligible household, providing much-needed relief from high energy costs.
