The government quickly announced the support package after the regulator Ofgem this morning revealed that the energy price cap would rise by 54%, taking average energy bills close to £2,000.

As part of the £9.1bn Energy Bills Rebate, all domestic electricity customers in England, Scotland and Wales (around 28 million households) will get £200 off their energy bills from October.

Energy suppliers will apply the discount, but it will then be clawed back from people’s bills. This will be in £40 instalments over five years, starting in 2023 when global wholesale gas prices are expected to come down, the government said.

On top of this, households in England which are in council tax bands A-D will also receive a £150 rebate from April. This one-off payment will be made directly by local authorities and it won’t need to be repaid. It is expected to apply to around 80% of homes in England.

Local authorities will use bank account details to credit accounts, but for households who don’t pay by direct debit, councils are expected to process claims in April.

Chancellor of the Exchequer, Rishi Sunak also announced funding of £144m to support vulnerable people and those on low incomes who do not pay council tax, or who pay council tax for properties in bands E-H.

Sunak said: “Right now, I know the number one issue on people’s minds is the rising cost of living.

“That’s why the government is stepping in with direct support that will help around 28 million households with their rising energy costs over the next year.

“We stood behind British people and businesses throughout the pandemic and it’s right we continue to do that as our economy recovers in the months ahead.”

Further, the chancellor today confirmed that the eligibility criteria for the Warm Home Discount will be expanded, so an extra three million vulnerable households will now benefit.