UK householders are currently saving around £64 on their gas and electricity bills as a result of energy and climate change policies.

The savings are expected to reach £166 by 2020 with energy policies in place than without them, according to new analysis published by the Government today.

It claims household energy bills without policies would be around £1,496 by 2020 but with the current policies, such as the Green Deal and the Energy Company Obligation (ECO) – which helps people make their homes more energy efficient – consumers’ bills would be reduced to £1,331 or 11% down. DECC claims current policies are putting a “cushion” between the price of energy in the market and the bills paid by householders.

Energy Secretary Ed Davey said: “Energy bills are going up. They’ve gone up a lot and they’re going up further – we are absolutely not complacent about that. That’s why we designed all these policies to help people so we can push the bills back down again as much as we can and we’re doing an awful lot more… because I am obsessed about trying to get the bills down to make that cushion as big as I possibly can.”

He added: “The analysis shows that our strategy of shifting to alternatives like renewables and of being smarter with how we use energy, is helping those that need it most save money on their bills.”

On an average household bill, 47% of the costs are made up of wholesale energy prices, 20% of network costs, 19% of supply costs, 5% for VAT and the rest 9% includes Government policy. In terms of the policy, DECC claims nearly half of the costs are for energy efficiency and fuel poor households. Although the costs of policies are expected to increase in future in order to support low carbon investment, the report claims energy efficiency policies will continue to drive down household bills.

DECC expects around half of UK households to have at least one major insulation measure by 2022, which it claims could help them save between £25 to £270.