Energy firms slash prices as regulator approves £100 rebate for 8 million homes
Households across the UK are set to receive a £100 rebate on energy bills in 2026 after Ofgem confirmed price cuts starting next month. Major suppliers including British Gas and E.ON have already slashed tariffs by up to 12% following regulatory approval.
Millions of UK households will see a £100 reduction on their energy bills in 2026 after Ofgem, the energy regulator, approved sweeping price cuts that take effect from December. The reductions, which follow a government-backed review, mark the first such intervention since 2023 and are expected to save the average dual-fuel household £120 annually.
British Gas confirmed a 12% cut to its standard variable tariff, the largest reduction among the Big Six suppliers. E.ON and Octopus Energy followed with 10% and 9% decreases respectively, while Scottish Power and EDF adjusted rates by 8%. Only OVO Energy held firm at current levels, citing long-term hedging strategies.
| Supplier | Price Cut | Effective Date |
|---|---|---|
| British Gas | 12% | December 1, 2025 |
| E.ON | 10% | December 5, 2025 |
| Octopus Energy | 9% | December 3, 2025 |
| Scottish Power | 8% | December 2, 2025 |
| EDF | 8% | December 4, 2025 |
| OVO Energy | 0% | No change |
The move comes after Ofgem’s latest price cap review, which found that wholesale energy costs had fallen by 15% since August. Regulators stressed that the cuts would not erode supplier margins, as firms had already locked in lower gas prices last quarter. "Consumers will see immediate relief without compromising industry stability," an Ofgem spokesperson said.
Key Points
- ✅ £100 rebate confirmed for 8 million households from January 2026
- ⚡ British Gas leads with 12% tariff cut; OVO holds rates steady
- 💡 Average dual-fuel household to save £120 annually
Not all regions will benefit equally. The rebate applies only to homes on default tariffs, excluding those locked into fixed deals or prepayment meters. Around 2.3 million households still use prepayment meters, which the government has pledged to phase out by 2028. Energy analysts warn that while the cuts are welcome, they may not offset the 54% increase in bills seen since 2021.
📋 By The Numbers
- 8 million — Households eligible for the £100 rebate
- 54% — Total rise in energy bills since 2021
- 15% — Drop in wholesale gas prices since August
Industry insiders suggest the price war could intensify in early 2026. "Suppliers are competing aggressively to regain customer trust after years of volatility," said a senior analyst at Cornwall Insight. The rebate, funded by a £600 million government pot, will be applied automatically to bills for eligible households. No action is required from consumers.
💡 Pro Tip
Check your latest bill before switching suppliers. With prices dropping, fixed deals may no longer offer the best value—use comparison sites to lock in rates before they rise again.
Opposition MPs have accused the government of acting too late. "Families are still paying over the odds for energy," said Labour’s shadow energy secretary. "The rebate is a sticking plaster, not a solution." The Conservatives defended the move, pointing to the £600 million allocation as proof of their commitment to lowering costs. Ofgem has warned that future price fluctuations remain possible, urging households to monitor their usage and switch tariffs if necessary.
- 📊 62% of affected households are expected to see net savings despite inflation
- 🔍 Fixed-deal customers may miss out unless they renegotiate
- ⚠️ Prepayment meter users face delays in rebate distribution
The rebate will appear as a credit on electricity bills starting January 1, 2026, with gas bill adjustments following in February. Ofgem has set up a dedicated helpline for queries, though response times may vary due to expected high call volumes. For those struggling with arrears, charities like Citizens Advice have urged suppliers to offer flexible repayment plans alongside the rebate.