Autumn Budget energy bill changes explained
What will it mean for my energy bills?
Back in autumn, the UK government announced a range of measures aimed at easing the cost of living. One headline announcement was a plan to cut household electricity bills by on average £150 a year.
But where does that figure come from? Will everyone see the full saving? And how will it actually show up on your bill?
In this guide, we explain what’s changing from April 2026, where the savings are coming from, and what it could mean for you.
Where are the energy bill savings coming from?
Your electricity bill is made up of several different costs. The largest part is the wholesale cost of electricity (what suppliers pay to buy power), followed by network costs (running and maintaining the grid), supplier operating costs and VAT.
A smaller – but still meaningful – portion goes towards policy charges. These fund national schemes designed to support renewable energy and improve energy efficiency, including:
- The Renewables Obligation (RO) – which supports large-scale renewable electricity generation
- The Energy Company Obligation (ECO) – which funds energy-efficiency upgrades for lower-income households
Good Energy has consistently pushed for policy charges to be removed from bills and moved into general taxation – as it’s a fairer way to spread the costs. We’re pleased to see the following charges being moved out of customer energy bills from 1 April 2026:
- Around 75% of Renewables Obligation costs will move out of electricity bills and into general taxation. This is expected to save a typical home around £80–£85 per year.
- The ECO scheme is ending, removing £59–£64 per year from the bills of customers who currently pay for it.
Will I really save £150 a year?
The £150 figure is an industry average that only represents the changes to policy costs explained above. Other areas of energy bills, such as paying for grid infrastructure upgrades, are set to increase. This means most customers will see a reduction in bills, but it’s likely to look different to £150 a year.
Your personal saving will depend on a few key factors:
1. How much electricity you use from the grid
If you use more than average, you’re likely to save more. If you use less, you’ll save less. For example, homes with solar panels often use less electricity from the grid, so their savings may be lower than the headline figure.
2. Your energy tariff
Savings will vary depending on whether you’re on:
- A fixed tariff
- A standard variable tariff (SVT)
- A smart or time-of-use tariff
- A deemed or default (price capped) tariff
The reduction will be built into your prices, but the exact impact will depend on how your tariff is structured.
3. Your energy supplier
Some suppliers, including Good Energy, did not pay into ECO due to our size. That means the majority of our customers have never paid the ECO charge through their bills from us.
As a result, while everyone will benefit from the Renewables Obligation change, our customers on SVT, fixed and time-of-use tariffs will see a smaller saving, because ECO has never been included in their bills in the first place.
Deemed and default customers will see a larger reduction as their prices are determined by Ofgem’s price cap.
4. Market competitivity
As energy costs fall, customers are starting to see the benefits of a more competitive market. We review our tariffs regularly to ensure they remain fair, while continuing to support our community of over 3,000 renewable generators. From April 2026, we’re reducing our tariff prices to reflect improving market conditions and pass those savings on to our customers.
How and when will the savings be reflected in bills?
Ofgem announced the new price cap level on 25 February, with these reductions included.
From 1 April 2026, suppliers must pass these savings onto price capped customers through their bills. Suppliers will also reduce their prices for customers on all other tariffs – including fixed rates. You’ll be able to see your savings on your energy bill from April.
In most cases, you won’t see this as a separate credit. Instead, it will be reflected as a lower electricity unit rate.
What does this mean in practice?
For most households, electricity prices should go down from April 2026, particularly if you are a higher-than-average user.
If you run a heat pump or charge an electric vehicle at home, or are considering these upgrades, this change will reduce the cost of doing so, because it lowers your electricity unit rate.
It’s worth noting that while these changes reduce electricity bills, they don’t remove the wider costs of running the energy system – they shift part of the funding into general taxation instead.
We welcome the government making changes to reduce the cost of living for people across the UK. While savings will vary by household, these measures make energy more affordable and help reduce the running costs for other sustainable upgrades, such as heat pumps or electric cars. Altogether, they mark a positive step toward a greener, more sustainable future for everyone.
Customer FAQs
Yes. We will pass on any reductions that affect our customers.
Your saving will depend on how much electricity you use and which tariff you’re on.
If you use more electricity than average, you’ll likely save more. If you use less, you’ll save less.
The £150 figure assumes customers currently pay both the RO and ECO charges. Our customers don’t pay the ECO charge, so only the RO portion will reduce their bills directly.
It also doesn’t factor in other components of your energy bill which are set to increase slightly to pay for upgrades to grid infrastructure.
Standing charges are increasing slightly to pay for upgrades to grid infrastructure. If you are a very low electricity user, it is possible your overall bill will marginally increase.
You’ll see the change reflected in your prices from April 2026.
In most cases, no. The reduction will be built into your unit rate rather than shown as a one-off credit.
Yes. The Renewables Obligation reduction will apply to all domestic customers, including those on fixed tariffs.
If your annual cost goes down, we’ll review your account and may adjust your Direct Debit to reflect your new expected costs.
You’ll still receive the reduction. The exact impact will depend on when and how you use electricity, because your prices vary by time of day.
The intention is to spread the cost more progressively, rather than charging every household the same amount through their electricity bill.
Yes. Your electricity unit rate will be going down, which should reduce the cost of running a heat pump or charging an EV — although your exact saving will depend on your usage.
These changes will impact your unit rate only.
