Energy bills drop today despite rising global prices – here's what it means for you

From today, 1 April, your gas and electricity bills should shrink for the next three months. That's despite the ongoing volatility in energy prices cause by the Middle East conflict. 

But after that, variable tariffs are predicted to increase by around 18%. 

From today, the price cap is set at £1,641 for a typical* household on a variable tariff. This is a drop of 7% from what you've been paying from January to March. It applies for three months.

The price cap protects domestic customers on variable tariffs from higher wholesale rates. It's particularly relevant now, as the global gas price is around double what it was before the conflict began.

Most customers on a fixed deal will also see a price cut from 1 April. Both cuts are mainly due to the government removing the costs of some environmental schemes from energy bills.

However, from July, bills are predicted to increase. The latest estimate is a jump of 18% from current rates, or £24 a month for the typical household*, according to industry consultancy Cornwall Insight. 

'Over a month into the Middle East conflict, energy markets are experiencing the kind of volatility not seen since 2022,' said Cornwall Insight's principal consultant Dr Craig Lowrey. 'A rise in July is pretty much unavoidable, but how high prices go remains to be seen.'

To protect yourself against predicted future price increases, it's still worth switching to a fixed-rate deal. There are a few options available, although choice is limited and companies are updating prices regularly.

Keep reading for more details on exactly what this means for your tariff, plus see the fixed deals that are still available today.

Read more: how to get the best energy deal.

Use our free, independent energy comparison service to compare gas and electricity prices and find the best provider for you

Variable-tariff customers: your energy bills from 1 April

The price cap on a variable, or out-of-contract, energy tariff drops by 7% from today. 

A typical household* will now pay £1,641 a year from April, a drop of £117 a year compared with January-March. That’s an average monthly saving of £9.75.

The price cap doesn’t limit your total bills; it caps the cost of each unit of gas and electricity you use. If your home uses more than average, you’ll pay more. If your home uses less, you’ll pay less. 

It's updated every three months by energy regulator Ofgem.

Read more: what is the energy price cap?

Fixed-tariff customers: your energy bills from 1 April

Fixed-tariff customers will also see bills cut from today. By now, your energy company should have told you your new rates and how much you'll save.

If you haven't heard yet, your energy supplier should tell you when it next contacts you.

You don't need to do anything for your new, lower rates to apply. They apply until the end of your contract.

Bills are falling because the government has removed the cost of two major energy schemes – the Energy Companies Obligation and Renewables Obligation – from all customers’ bills.

Almost all energy suppliers funded both schemes, so now that they no longer have to pay, they must pass the savings on to you. 

A few small suppliers had to fund only one scheme, so they have smaller savings to pass on to their customers. They include:

• 100Green
• Fuse Energy
• Good Energy
• Home Energy
• Tulo Energy.

If you're a customer of one of these companies, you should still see a small saving. Exactly how much should have been communicated by your supplier.

Besides this, your fixed tariff's rates won't change until the end of your contract.

If you have a fixed tariff with a traditional prepayment meter (that uses a key or card), the savings will apply the first time you top up after 1 April.

Find out more: energy tariffs explained.

Heating oil prices are also high, and limited help is available for heating oil customers. In England, you can access it via the new Crisis and Resilience Fund from 1 April. Find out more: Heating oil prices spike with Middle East conflict: here's what you can do. 

Variable-tariff energy bills from 1 July

The current price cap of £1,641 for a typical household applies from 1 April to 30 June.

After that, the price cap is predicted to rise to around £1,929 a year for a typical* household, according to Cornwall Insight.

There's still time for this prediction to change. Energy regulator Ofgem, which sets the cap, looks at wholesale prices over a three-month period to determine its rates.

We're now halfway through those three months, so the higher prices in March will be factored into price-capped rates from July to October.

How much the price cap increases will depend on how much more global wholesale gas prices rise and how long they stay high for.

We're expecting the price cap for July to October to be announced around 27 May. 

'If higher wholesale prices continue, it will be the effects on the October cap that have the most impact,'  Dr Lowrey at Cornwall Insight said. The government has already said that it is considering options for how best to help energy customers through autumn if that turns out to be the case. 

If you're worried about affording future payments, check the help available if you're struggling to pay your energy bills.

Fixed-tariff energy bills from 1 July

If you're on a fixed tariff, the cheaper rates for your tariff from 1 April, when costs of two government schemes must be removed, will apply until your contract ends. 

No other terms of your contract will change. That will still apply even if the price cap jumps up in July. 

However, when your contract ends, you'll need to fix a new deal. You can find the end date of your tariff in your energy supplier app, your online account, or on your latest statement.

If you do nothing when your fixed tariff ends, you'll move automatically onto your energy supplier's variable (or out-of-contract) tariff. This is typically priced at the level of the price cap, which changes every three months. 

If your fixed tariff has exit fees, you don't have to pay them if you switch within the last 49 days.

Here's how to switch energy supplier.

Should I fix my energy prices?

We usually recommend fixing your energy tariff, and that's still our advice. It's still the best long-term option for most households. However, due to volatile global energy prices, the market for fixed deals is very limited at the moment.

When we last checked, on 31 March, the cheapest fixed deal cost around £1,785 a year for a typical* household. That's around £2.50 more each month than the January-to-March price cap.

Fixing a deal at around this price would mean you'd pay more than the price cap for the next three months (by £12 a month, based on a typical* household). 

You'd then expect to save around the same amount per month compared with the predicted higher price-capped rates in summer.

The exact price you'll pay for a fixed deal depends on how much gas and electricity you use. 

See the latest cheapest energy tariffs in our guide to how to get the best energy deal.

Or, head straight to our energy comparison tool to check prices and find the best provider for you.

Since the conflict began, we've seen more interest in solar panels and heat pumps. The Which? Home Energy Planning Tool can help you decide what might be right for your home longer term.

*A typical household uses a medium amount of energy, defined by Ofgem as 11,500kWh gas and 2,700kWh electricity a year.