Watch: Energy price cap to rise more than 80% to £3,549 from October
At the start of the year, the average bill was £1,277.
The new cap will apply to 24 million households in England, Scotland and Wales on default energy tariffs from 1 October.
Meanwhile, the 4.5 million pre-payment meter customers, who are often the most vulnerable and most likely to be in fuel poverty, will see an even more punishing increase with their average annual bill set to go up to £3,608.
However, that was announced at a time when bills were forecast to reach £2,800 a year from October, and Ofgem’s chief executive Jonathan Brearley today urged the incoming prime minister and their new cabinet "to provide an additional and urgent response to continued surging energy prices."
Meanwhile, Adam Scorer, chief executive of fuel poverty charity National Energy Action, said "a warm home this winter will be a pipedream for millions as they are priced out of a decent and healthy quality of life."
The stark warning comes as a huge proportion of many families’ incomes will be going on energy bills.
According to analysis by Yahoo News UK, households in 80 of the UK’s 362 affected local authority areas will now spend more than a fifth of their gross disposable income on energy bills.
(A full list of the 80 areas where people will spend more than a fifth of their income on bills can be found at the bottom of this page.)
Gross disposable household income (GDHI) is defined as the amount of money that all of the individuals in the household sector have available for spending or saving after they have paid direct and indirect taxes, and received any direct benefits.
Nottingham, Leicester, Sandwell and Blackburn with Darwen are set to be the worst affected, with the average household in these areas forced to spend a quarter of their income on energy bills.
It compares to the five areas - all in London - where people will spend the lowest percentage of their income on energy bills. They are Kensington and Chelsea (4.16%), Westminster (6.61%), Camden (8.06%), Richmond upon Thames (8.18%) and Hammersmith (8.25%).
Today, a leading think tank said the next PM will be unable to avoid introducing a fresh package of support for households.
The Institute for Fiscal Studies said Liz Truss or Rishi Sunak, the Conservative leadership contenders, will have to put together a "substantial package of support."
It said the new rise in the price cap means the current government support package will cover only 47% of the rise in bills.
The proposals put forward by Truss and Sunak have been criticised for failing to meet the scale of the challenge, though frontrunner Truss has promised an emergency budget to address the crisis if she enters Number 10.
Reacting to the price cap news today, she pledged to "ensure people get the support needed."
Consumer champion Martin Lewis, founder of the Money Saving Expert website, said today of what Truss or Sunak must do: "I’m going to be agnostic over the solution, but it will involve spending substantial amounts - billions of pounds of government money - to stop some of the most vulnerable and many middle-income earners from having some terrible choices to make this winter.
"We have to hope that will be in place."
Here are the 80 areas of the UK in which households will spend more than 20% of their income on energy bills
Blackburn with Darwen: 24.50%
Blaenau Gwent: 24.26%
Kingston upon Hull, City of: 23.81%
Merthyr Tydfil: 22.76%
South Tyneside: 22.30%
Rhondda Cynon Taf: 22.26%
Great Yarmouth: 21.87%
Glasgow City: 21.71%
Neath Port Talbot: 21.58%
Newcastle upon Tyne: 21.54%
North East Lincolnshire: 21.42%
Dundee City: 21.38%
County Durham: 21.36%
Redcar and Cleveland: 21.02%
East Lindsey: 20.66%
North Lincolnshire: 20.61%
Telford and Wrekin: 20.57%
East Ayrshire: 20.51%
St. Helens: 20.48%
North Lanarkshire: 20.41%
North Ayrshire: 20.31%
Isle of Anglesey: 20.25%