Energy regulator Ofgem has announced there will be an 80pc increase in its price cap from October.

But what is the energy bill price cap, what will happen to it in the future and what help is available for households this winter?

1. What is the price cap?

The price cap on energy bills is intended to ensure households are not ripped off by their energy suppliers. It was introduced in January 2019.

Twice a year, energy regulator Ofgem sets the maximum price that households on a default tariff would pay for every unit of gas and electricity they used for the next six months.

It also capped the profit that energy suppliers were allowed to take for supplying the service at 1.9pc.

The cap is calculated based on the wholesale price of gas and electricity and also includes allowances for tax, charges paid to the energy networks, green levies and social payments.

2. Why is the price cap going up?

The cap on energy bills is linked to the wholesale price of gas and electricity which is based on European markets.

Wholesale prices have soared by around eightfold in the last year. That rise has been passed on to customers – the price cap already at a record £1,971 this summer.

Gas prices were already increasing last summer with demand bouncing as countries emerged from lockdown but the situation was made much worse when Russia started to restrict gas exports to Europe following its invasion of Ukraine.

Gas prices are also decisive for electricity prices. Over the last year, 42pc of the UK’s electricity came from burning gas.

The 80pc rise announced on August 25 will push the cap to £3,549 per year for the average household. This is the highest it has ever been and will come into force on October 1.

Electricity will rise from 28p per kilowatt-hour (kWh) at the moment to 52p from October 1. For gas, the price will rise from 7p to 15p per kWh.

3. When will the price cap change again?

Experts expect the cap to rise significantly in January of next year and again in April, and then to fall in July and October.

The exact levels of the cap remain to be seen. Experts at Cornwall Insight expect the cap to hit £5,387 in January, while their colleagues at Auxilione expect it to reach £5,405.

In April, Cornwall expects a £6,616 cap, while Auxilione thinks it could reach as high as £7,263.

Cornwall’s forecasts for the July and October 2023 caps are £5,897 and £5,887 respectively, while Auxilione expects it to reach £6,485 and £6,006.

4. What support is available for me?

All households have been promised a £400 discount on their energy bills. This support was announced in May and will be paid in six-monthly payments from October.

For direct debit customers this will be taken off their payments, while prepayment meter customers will be given discount vouchers from the first week of every month. These will be issued by text, email or by post.

Eight million of the most vulnerable households will also get extra support, taking the total they can get to £1,200.

These include a £650 one-off payment to households on means-tested benefits, a £300 payment to pensioners and £150 for six million people who receive disability benefits.

5. Will the government announce more support?

Charities, think tanks, opposition parties and potential future prime ministers have said the Government will need to do more for struggling households.

But any extra support will have to wait until the next prime minister is in place.

The current Government has said that it is exploring the options and will present them to the new prime minister when they come into office next month.