One million households to have energy bills capped this winter

One million households will have their energy bills capped this winter - saving them £120 a year.

Energy watchdog Ofgem announced they would extend an existing "safeguard tariff" for vulnerable customers this winter.

It comes a week after Theresa May promised to cap energy charges in her speech at the Tory conference.

But the Government's plans cannot come into force until official legislation has been passed.

Ofgem is introducing new rules to allow suppliers to roll customers coming to the end of their contracts on to another fixed deal, instead of a poor value standard variable tariff.

It will monitor suppliers to ensure any new default deals do not "become another way to penalise customers who rarely switch".

The regulator is also proposing that consumers would receive automatic compensation if their switch goes wrong.

Credit: PA

Dermot Nolan, chief executive of Ofgem, said: "Ofgem shares the Government's concern that the energy market is not working for all consumers and is determined to reduce the detriment suffered by those overpaying for their energy, particularly those who are vulnerable.

"The Government's proposed Bill to provide price protection to those who remain on poor value default deals, such as the standard variable tariff, will give these households peace of mind about the price they pay for their energy."

However, the regulator warned energy suppliers that they must step up efforts to get more customers on default tariffs on to better value deals.

Mr Nolan added: "We expect suppliers to do more to get customers on poor value default tariffs on to better deals.

"We also expect suppliers to co-operate when Ofgem initially introduces a safeguard tariff for around one million vulnerable households this winter."