Energy prices will rise for millions of people across the UK in October, right at the start of the cold weather.
Regulator Ofgem said the price cap for default domestic energy deals would be raised to cover suppliers’ extra costs.
The typical gas and electricity customer is likely to see their bill go up by £139 to £1,277 a year.
Charities warned the timing would hit struggling families hard, who already face losing an extra £20 a week from Universal Credit in October.
Prepayment customers will see an increase of £153, from £1,156 to £1309, the regulator said.
Ofgem chief executive Jonathan Brearley told the BBC: “The reason the price cap is going up is there has been a record increase in energy prices across the board, not just in gas and electricity but in petrol and diesel.”
He urged customers to shop around for the best tariffs, saying there were big savings to be made by switching.
“You don’t have to live with this tariff. The price cap is a backstop. We’d encourage any customer, particularly those struggling to pay their bills, to contact their supplier, and get access to a wide-range of help and support,” he said.
“This is a devastating increase,” said Peter Smith, director of policy and advocacy at fuel poverty charity National Energy Action.
“Millions of household budgets are already stretched to the limit and this massive increase could not be coming at a worse time.”
Ofgem said rising wholesale costs were behind the increase, adding that the existence of the price cap meant households would save between £75-£100 a year.
The watchdog also pointed out energy users could switch to a better deal to save up to £200.
However, the Resolution Foundation says policymakers need to do more to help families who are close to the poverty line.
Jonathan Marshall, senior economist, said the government must focus on widening the current warm homes discount scheme, as well as reversing the planned removal of the £20 Universal Credit uplift. There should also be more targeted support for families at risk of falling into fuel poverty.
“A rise in in energy prices will disproportionately impact those who are already struggling,” said Mr Marshall.
Who is affected?
That accounts for about half of all UK households. The remainder are on so-called fixed deals, which will not be affected.
Around four million prepayment meter customers will also be affected.
The cap sets the prices that suppliers can charge for each unit of energy, but that does not mean there is a limit to how much people can pay.
The more gas and electricity you use, the higher the bill.
Why are prices rising?
Domestic energy bills are linked to wholesale prices, the price at which energy businesses have to pay for gas and electricity.
When wholesale energy prices fell last summer following the first lockdown, Ofgem reduced the level of the cap by £84 for last winter.
But in February it increased the cap by £96, blaming rising wholesale costs.
Since then the wholesale cost of energy – which account for 40% of domestic bills – has climbed by more than 50%, which has led to the latest increase.
EDF, one of the UK’s biggest energy providers, said the “unprecedented rate” at which wholesale prices were rising meant that customers would “at some point see the impact of this global trend”.
A spokesman said: “We know this will be worrying news for customers of all suppliers – we will be directing financial assistance to those most in need through a £1.9m support fund, helping customers reduce their bills, manage their debt and even helping with costs for things like more energy efficient white goods.”
The industry’s trade body, Energy UK, said people worried about their bills should “pick up the phone and talk to your supplier”.
Chief executive Emma Pinchbeck told the BBC’s Today radio programme: “There’s help and assistance available, particularly for those that are vulnerable and fuel poor.” She also urged people to consider switching supplier, calling it a “straightforward” process.