Power cut
Think tank: Resolution Foundation
Author(s): Jonathan Marshall
February 21, 2026
This report from UK think tank the Resolution Foundation examines what the Government’s energy bill discount means for households and what comes next.
Next week, Ofgem is expected to announce that the Q2 2026 energy price cap will be nearly £120 below current levels.
This reduction is overwhelmingly driven by the Government’s energy bill discount, which will deploy approximately £6.9 billion of public spending over the next three years to lower one of British families’ biggest expenses.
The discount is well designed: by targeting electricity unit rates, it supports the drive for electrification essential to meet the UK’s net zero targets. It also disproportionately supports those with the largest bills, typically those with electric heating, larger families or high levels of electricity demand. So while the typical family will be around £135 better off in 2026-27, one-in-four (24 per cent) will save more than £200.
