British Gas, EDF, EON, Ovo, Octopus Customers to Receive £150 Energy Bill Discount

Starting in April, customers of British Gas, EDF, EON, Ovo, and Octopus on typical energy bills will benefit from a £150 discount, thanks to an initiative introduced by the Labour Party government. Chancellor Rachel Reeves has committed to reducing household energy costs by this amount to help struggling families cope with the rising cost of living.

This reduction will be achieved by abolishing the Energy Company Obligation (ECO) scheme, which was implemented under the previous Conservative government. The ECO scheme, intended to alleviate fuel poverty, has cost households an estimated £1.7 billion annually and primarily disadvantaged 97% of families in fuel poverty by charging them more than they saved. By scrapping this failed scheme, the government aims to ease financial burdens on families.

Funding for this discount will come in part from removing the renewables obligation levy from energy bills and shifting 75% of energy levy costs onto general taxation, making the measure more progressive. Additionally, funds will be redirected to support initiatives such as the Warm Home Scheme, though further details on this are forthcoming.

Energy expert and broadcaster Martin Lewis explained the discount’s mechanics: energy unit prices will reduce by approximately 3.3p per kilowatt-hour for electricity and 0.3p per unit for gas (pre-VAT). For an average user, this translates to roughly £150 in annual savings, with higher or lower savings depending on actual consumption.

Reeves emphasized that these cuts will be fully passed on to consumers by suppliers, including those with fixed tariffs, ensuring maximum relief. She also voiced hope that future measures might address standing charges as well.

This announcement comes amid preparations for the January energy price cap rise to £1,758, underscoring the government’s commitment to reduce energy costs immediately and in the future. Reeves stated in the Commons, “Money off bills, and in the pockets of working people. That is my choice. Not to neglect Britain’s energy security, like the Tories did. Not to leave working families to bear the brunt of high prices. But to get energy costs down now and in the years to come. That is the Labour choice.”