Major energy supplier E.ON has confirmed it will join rivals British Gas and Octopus Energy in automatically passing on a £150 annual discount to customers on fixed tariffs. The move follows the Labour government's recent Budget measures aimed at cutting household energy costs.
Martin Lewis Breaks Down the Savings
Consumer champion and TV money expert Martin Lewis confirmed the development via his social media channels on January 2nd, 2026. He detailed that the discount stems from two key government actions: shifting some policy costs from energy bills onto general taxation and cutting the ECO (Energy Company Obligation) scheme.
"The cut to the price cap will be via a 3.5p/kWh (around 13%) reduction in electricity prices and a 0.35p/kWh (around 6%) reduction in gas, if everything else remains equal," Lewis stated.
He added an important note of caution, explaining that the actual savings customers feel will be slightly less than the headline figures. This is because the price cap was previously forecast to rise in April. "Currently around a 6% reduction in April's Price Cap over January's is predicted," he said.
Industry Calls for Clarity and Universal Action
Lewis emphasised that the government is pushing all energy firms to follow the lead set by E.ON, British Gas, and Octopus. He stressed that transparent implementation is crucial. "I believe a straight cut on all bills on 1 April is the cleanest and best way to do it," he remarked.
Richard Neudegg, director of regulation at Uswitch.com, praised the three suppliers for providing clarity. "Households can now confidently sign up with these suppliers for a fixed deal that will effectively save them money twice," he said.
He outlined the dual benefit: securing cheaper rates during the winter and then receiving an automatic further price drop in April without any action required.
Don't Wait to Save on Your Bills
Uswitch is now urging all other energy suppliers to publicly confirm how and when their customers will receive the savings. This transparency would allow more people to confidently shop for the cheapest energy this winter.
Neudegg also had clear advice for those not yet on a fixed deal: "If you’re on a standard tariff, don’t wait for April to save on your energy bills. There are deals available that are £233 below the January price cap, meaning you can save on your heating bills during the coldest months of the year."
The key takeaway for consumers is that significant savings are available immediately through switching, with the promised Budget discount providing an additional boost from April for those on fixed tariffs with the leading suppliers.
