Britain's energy price cap to protect 11 million households on poor-value default gas and electricity tariffs will come into force on January 1, regulator Ofgem has confirmed.
The cap will save customers who use a typical amount of gas and electricity around £76 per year on average, with a typical customer on the most expensive tariffs saving £120.
In total, the price cap will save British consumers around £1 billion.
Ofgem said the price cap level will be updated in April and October every year to reflect the latest estimated costs of supplying electricity and gas, including wholesale energy costs to ensure "those protected always pay a fairer price for their energy".
But Ofgem added it is likely it will announce an increase in the level of the cap in February, to take effect in April, due to a significant increase in wholesale energy costs over the past year.
Dermot Nolan, chief executive of Ofgem, said: "From January 1, the energy price cap will put an end to customers on default tariffs being overcharged as much as £1 billion for their gas and electricity.
"The price cap will ensure that whether energy costs rise or fall suppliers are not feathering their nest and changes in energy prices will reflect the underlying costs to heat and light our homes.
"Consumers who want to cut their bills further should shop around for a better energy deal and while the cap is in place, we will continue our work to make this as easy as possible."