Energy prices for millions of households will rise to the highest level for three years, under regulator Ofgem’s price cap.

The cap reflects the rise in the wholesale cost of gas, paid by suppliers, but will hit household bills just as the colder weather arrives in October.

Ofgem said the price cap will increase by 4% compared with the current level, with a household using a typical amount of gas and electricity paying £60 a year more.

More than a third of households are now on fixed tariffs so their prices will not change.

Suppliers say energy debt has rocketed and, with high bills likely to persist, have called for more support for those struggling to pay.

The government says VAT is being cut from electricity bills in October, including for those on fixed deals.

Neil Kenward, Ofgem’s director general for markets, said: “High international gas prices are continuing to drive energy costs in the UK. We welcome the government’s intervention to remove VAT from electricity bills, without which customers would have faced even higher costs this winter.

“Savings are available by choosing a fixed tariff, which are available at £100 or more below the October price cap.”

Around 35% of households – or 11 million households – are on fixed tariffs already, but 22 million in England, Wales and Scotland are on tariffs affected by the price cap.