The regulator has announced a 4% increase to the energy price cap to £1,723, adding £60 a year to average household energy bills.

The increase accounts for the proposed removal of VAT from household electricity bills, which Prime Minister Andy Burnham said would cut around £45 from the annual cap from October. Current forecasts suggest the price cap will rise again in January.

Under Ofgem’s previous definition, the price cap would have risen from £1,862 to £1,935, up £73.

This would have marked an £797 rise on the amount households were being charged before the energy crisis hit in the autumn of 2021.

Advice Direct Scotland, which runs the national energy advice service energyadvice.scot, said household budgets are under “huge pressure”.

Craig Tobin, head of business development and impact at Advice Direct Scotland, said: “This rise in the price cap from October will cause concern for Scottish households, particularly as we move into autumn and people start to use more energy on heating their homes.

“Household budgets are under huge pressure, with this price rise adding further stress as the cost of living remains extremely high.

“People will be paying hundreds of pounds more than they were before the energy crisis hit five years ago, which is why we are calling for the introduction of a social energy tariff, which could give the most vulnerable people access to the cheapest deals.

Citizens Advice Scotland (CAS) said the announcement offers no relief to people in Scotland who are struggling to pay their energy bills.

CAS director of impact David Hilferty said: “Our advisers across Scotland see every day how people are struggling to pay for the essentials, especially as energy bills continue to rise. Increasing inflation shows that the cost of living is getting worse, we are regularly seeing the brutal reality of people who can’t afford to heat their homes. Many are being pushed into debt to pay for the essentials we all need.

“And as the crisis deepens, poor practices of energy companies is making it harder for people to resolve energy problems. Often, this is the result of failures in customer service and case-handling processes, all of which puts access to support further out of reach.

“With another winter fast approaching, the time to act is now. We need bold, targeted, and urgent action across the energy sector to make sure that people can afford to heat and light their homes, without which people will experience real harm. The UK government and regulators need to introduce measures like a social tariff on energy bills and a robust energy debt relief scheme.

“Energy suppliers must ensure that their processes are robust, communication is clear and accessible, and staff are properly trained to support people in vulnerable circumstances.”

Chief executive of Consumer Scotland Sam Ghibaldan added: “Consumers are facing a sharp rise in energy prices, which will come into effect as winter approaches.

“This is the second consecutive quarterly increase this year, and it will hit those who use gas hardest at a time when finances are already stretched. In addition to heightened costs, energy debt continues to reach unprecedented levels.

“Our annual energy affordability survey found that, while these increases impact on all consumers, those who are more vulnerable will be hit more severely.

“Households on low incomes and consumers with disabilities or health conditions, including the terminally ill, have particular difficulty keeping up with their bills.

“While government does provide some support, current schemes do not consistently reach the households facing the greatest affordability pressures.

“We are developing proposals for the UK and Scottish governments to improve the use to data to ensure support is better targeted at households facing the greatest affordability challenges.

“We also want stronger engagement by energy suppliers to agree affordable repayment plans for consumers in debt, and are asking the UK Government to urgently introduce a debt relief scheme for households who are struggling.

“The volatility of fossil fuel costs also underlines why moving to low-carbon technologies is a consumer protection priority.

“As energy costs rise again, governments, regulators and suppliers must work together to ensure that households facing the greatest financial pressures receive the support they need to keep their homes warm and safe this winter.”