British energy regulator Ofgem said its price cap for average household energy bills would rise by about 21pc to £4,279 ($5,172) a year from January to the end of March 2023.
Households, however, will not pay this amount as Ofgem's price cap has been superseded by a government-backed price guarantee set at £2,500 a year for average consumption until the end of March 2023.
The government help, intended to cushion consumers against the economic shock of war in Ukraine, comes as Britain faces what is expected to be a lengthy recession.
Ofgem's announcement means the government action will save typical households about £1,779 a year, compared with what they would have had to pay under the regulator's cap.
But even with the help, the £2,500 a year average bill this winter is almost double the amount households paid last year.
The government price guarantee rises to an average £3,000 a year from April 1 until the end of March 2024.
Analysts at Cornwall Insights forecast the latest Ofgem cap level means the total cost of the government scheme to help with energy bills is expected to reach £38-42bn pounds over the 18 months it will be in place.
European energy prices started to rise as the world emerged from COVID-19 lockdowns and then surged in February following Russia's invasion of Ukraine.
As a result, the cost of wholesale gas has increased, and the price that suppliers need to charge per unit of energy has gone up sharply, prompting the government to step in to help consumers