Millions of households are set to receive a direct £150 reduction on their annual energy bills, after supplier E.ON Next pledged to pass on government savings in full.
No Ifs, No Buts: The £150 Promise
Energy giant E.ON Next has made a firm commitment to its customers, promising that savings announced by Labour Chancellor Rachel Reeves will be applied directly to household bills. The reduction, averaging £150 per year, is scheduled to begin on 1 April 2026.
A spokesperson for the company stated unequivocally: “When these savings start in April, we’ll pass them on in full to all our customers. No ifs. No buts. No small print. People are under pressure and they deserve to feel the benefit directly on their bills.”
The savings stem from government plans to scrap certain legacy costs and green levies. Specifically, the state will fund 75% of the domestic cost of the Legacy Renewables Obligation from 2026 to 2029 and will terminate the Energy Company Obligation (ECO) scheme from 31 March 2026.
Broader Government Package and Fuel Poverty
Alongside the bill cuts, the government is injecting an extra £1.5 billion into tackling fuel poverty through the Warm Homes Plan. This brings the total support package to £15 billion since the Spring Budget review.
However, some industry analysts caution that the net saving for consumers might be less than £150 once new charges linked to funding the Clean Power Plan are taken into account.
Industry Backlash Over Windfall Tax Decision
The announcement has sparked significant controversy within the energy sector, particularly regarding the government's decision not to replace the Energy Profits Levy (EPL) – commonly known as the windfall tax – in 2026.
Offshore Energies UK (OEUK), which represents North Sea operators, expressed profound disappointment. The group warns the policy will ‘cost tens of thousands of jobs, cripple investment, and undermine Scotland and the UK’s energy security.’
OEUK Chief Executive David Whitehouse said: "The government has chosen a path that will see 1,000 jobs continue to be lost every month, more energy imports and a contagion across supply chains and our industrial heartlands." He emphasised that "the future of North Sea energy depends on investment, which won’t come without urgent reform of the windfall tax."
Maurice Cousins, Campaign Director of Net Zero Watch, labelled the retention of the tax "catastrophic and deeply cynical," arguing it accelerates industry decline, deters investment, and increases Britain's dependence on foreign energy imports.
Environmental Groups Hail 'Historic' Move
In stark contrast, environmental campaigners have welcomed the government's stance. Areeba Hamid, Co-Executive Director of Greenpeace UK, described it as a historic moment.
"Britain has just made history. Closing the door to new exploration marks the beginning of the end of oil and gas in this country," she said. "By standing firm on its manifesto promise, the government has shown genuine global climate leadership."
The divergent reactions highlight the complex balancing act between providing immediate cost-of-living relief for households, ensuring energy security, and transitioning towards a net-zero future.
