Millions of UK households are set to receive a welcome reduction in their energy costs after supplier E.ON confirmed it will pass on government-mandated savings. The move follows Chancellor Rachel Reeves's Budget announcement last month of an average annual cut of £150 per household from April 2026.
How the Energy Bill Savings Will Work
The promised reduction stems from the removal of several green levies currently added to bills. Key changes include the termination of the Energy Company Obligation (ECO) scheme and a reduction in household contributions to the Renewables Obligation.
E.ON has stated that the savings will be applied automatically to all customer accounts, whether they are on a variable or a fixed-rate tariff. This addresses a significant concern, as customers on fixed-term deals are often locked into a set price and can miss out on immediate market changes.
A spokesperson for E.ON Next gave a firm commitment: “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.”
Industry-Wide Action Following Government Pressure
E.ON is the latest major supplier to make this pledge, following similar confirmations from industry giants British Gas and Octopus Energy. The unified response comes after Energy Secretary Ed Miliband wrote to firms, urging them to ensure the cut benefits every consumer, including those on fixed-term tariffs.
In his letter, Mr Miliband emphasised the government's commitment to easing financial pressure, stating the clear expectation that “every single penny of our intervention at this Budget is passed on to consumers.”
Octopus Energy's CEO, Greg Jackson, welcomed the government's action, saying: “Octopus customers can rest easy – we’ll do it all automatically. We hope other suppliers will follow our lead so everyone can benefit.” A British Gas spokesperson also confirmed their customers, including those on fixed deals, would see the full benefit.
What It Means for Bill Payers
The key takeaway for consumers across England, Scotland, and Wales is that no action will be required to receive the reduction. The £150 average saving will be applied directly to bills starting in April 2026. The commitment from multiple major suppliers ensures widespread application, though the exact impact on individual bills will vary based on usage and tariff.
This news offers a future financial reprieve, though it comes against a backdrop of ongoing market volatility. Households are reminded that while this cut is secured for 2026, other factors can influence energy prices in the interim.
