The incoming energy price cap will save 11 million households around £75 a year on average under plans to cap rip-off tariffs at £1,136, energy watchdog Ofgem has announced.
Ofgem said a typical consumer on the most expensive default standard variable tariffs would save more than £120 a year under its plans.
In total, the cap would save consumers around £1 billion, it said.
The regulator, which was given powers by the Government in July to introduce the cap, hopes to have the measures in place by the end of the year.
Dermot Nolan, chief executive of Ofgem, said: “Ofgem has made full use of the powers Parliament has given us to propose a tough price cap which will give a fairer deal to consumers on poor-value default tariffs.
“Once the price cap is in place, all households in Great Britain covered by the cap will be protected from being overcharged for their energy.
“Consumers can have confidence that falls in energy costs will be passed on to them and if costs increase, Ofgem will ensure that any rise will be due to genuine increases in energy costs rather than supplier profiteering.
“Households protected by the cap will be able to save even more money by shopping around for a better deal.”
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