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Ofgem’s energy price cap is set to rise this winter, leaving customers hit by an average of £149 a year, the energy regulator has announced.

The cap has risen from £1,568 to £1,717 – a 10 per cent increase. It will come into effect for all households from 1 October and will remain at that level until the new year.

The extra £12 a month on average won’t be welcome news for bill payers already struggling to keep up with other costs. Rampant inflation over the past two years has seen household spending hit record highs as everything from groceries to rent and mortgages has become more expensive.

UK inflation fell to the Bank of England’s target of 2 percent for the first time in two years in July, although it rose again to 2.2 percent in August. Against the backdrop of this positive economic news, many hoped that energy bills would do the same.

That won’t be the case this winter, as customers will have to expect to pay more per unit, while of course also using more to keep the cold out.

Ofgem’s energy price cap is not exactly what you will be charged for your consumption, nor is it a maximum. Rather, it is the amount an average household can expect to pay for their energy. And with the winter months likely to mean that most households will be using more than average, many should expect to pay higher costs of more than 10 per cent.

To keep track of consumption, some people may find it useful to know how much they are paying for one unit of energy (a kWh). After the new increase, the average unit rate for electricity will rise to 24.5p per kWh, up from 22.36p. For gas, the unit rate will be 6.24p per kWh, up from 5.48p.

Jonathan Brearley, CEO of Ofgem, said: “We know this price cap increase will be extremely difficult for many households.

“Anyone struggling to pay their bill should ensure they have access to all the benefits they are entitled to, particularly pension credit, and contact their energy company for further help and support.”

Martin Lewis has also given his opinion on the price cap increase to advise bill payers on how best to deal with it. The money guru says people “can and should” save money by switching energy supplier now. He points to a number of fixed rate deals that allow people to pay below the new cap level, but warns “they may not be around for much longer.”

Mr Lewis also says the government should reconsider its decision to change eligibility for Winter Fuel Payments so that only pensioners who are eligible for Pension Credit will receive it. The controversial move has been welcomed by some but criticised by many fuel poverty and older people’s charities.