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 is was before the conflict began.

Most fixed deal customers 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.

But from July, bills are predicted to increase. The latest estimate is a jump of 18%, or £24 per month for the typical household*, from current rates, 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,' Cornwall Insight's principal consultant Dr Craig Lowrey said. 'A rise in July is pretty much unavoidable, but how high prices go remains to be seen.'

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

Keep reading for more detail on exactly what this means for your tariff, plus see the fixed deals which 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 is 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.

The cut is because the costs of most of two government schemes (the Energy Companies Obligation and Renewables Obligation) are being removed 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 only had to fund one scheme so have smaller savings to pass onto their customers. They include:

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

If you're a customer of one of them, you should still see a small saving. Exactly how much should have been communciated 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 for heating oil customers is available. 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 per year for a typical* household, according to Cornwall Insight.

There's still time for the prediction for the July price cap 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 by how much, and for how long, global wholesale gas prices stay high.

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,'  Cornwall Insight's Principal Consultant Dr Craig Lowrey said.

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

Fixed tariff energy bills from 1 July

If you are 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 out 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 want to switch in 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 global energy prices still being volatile, the market for fixed deals is very reduced at the moment.

When we last checked, on 31 March, the cheapest fixed deal cost around £1,785 per 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 per 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 begun, 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 per year.