Energy bills will rise to £3,000 a year for the typical household from April - up from £2,500 now, Jeremy Hunt has announced.
The rise means households won’t pay the £3,739 that is being predicted by energy analysts at Cornwall Insight.
But bills are still eye-wateringly high compared to a year ago, when the Ofgem price cap was £1,277 in October 2021.
The Chancellor confirmed the Energy Price Guarantee will be extended beyond April in his Autumn Statement today.
Mr Hunt said: "From April, we will continue the Energy Price Guarantee for a further 12 months at a higher level of £3,000 per year for the average household.
"With prices forecast to remain elevated through next year, this will still mean an average of £500 support for every household."
Mr Hunt also announced further support for the most vulnerable households, with further cost of living payments worth up to £1,350.
This includes £900 to households on certain means-tested benefits, including Universal Credit, Tax Credits and Pension Credit.
Another £150 would go to people on disability benefits including Personal Independence Payment.
And it would give another £300 to pensioner households who already receive a Winter Fuel Payment.
It comes after the Chancellor first confirmed the Energy Price Guarantee will be watered down last month, instead of running for two years.
The Government help should have been set at £2,500 until October 2024, but Mr Hunt had already announced that it won't carry on in its current form beyond April 2023.
This is the first time the Chancellor has issued clarity on how exactly the help will carry beyond next April.
Much like the Ofgem price cap, which the Energy Price Guarantee replaced, the headline £3,000 figure isn't a total cap on your bills.
It is the unit rates and standing charges that are capped - this means if you use more energy, you could pay more than this figure.
Similarly, use less energy and your bill could be less.
The new £3,000 Energy Price Guarantee will last for 12 months, taking households to April 2024.
