Millions of prepayment meter households will no longer pay more than direct debit customers under plans confirmed by Jeremy Hunt in his Budget today.
Those on prepay meters are often among the lowest income households - but they end up paying more because energy firms pass on the costs of managing the meters.
However, from July, prepay customers will no longer pay more than direct debit households.
The Treasury first issued a statement on this earlier this week, and said it will save around four million households £45 a year.
It estimates the change will cost the taxpayer £200million.
It comes after energy regulator Ofgem confirmed a ban on the forced instalment of prepayment meters will be extended "indefinitely".
The ban had been sparked after an investigation by The Times claimed British Gas used debt collectors to break into the homes of vulnerable customers to install meters.
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British Gas suspended the future instalments, before Ofgem then asked all suppliers to follow suit. The ban had been due to end on March 31.
Meanwhile, the Chancellor also confirmed today that he is delaying a £500 energy bill rise - but households will still be worse off from next month.
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The Energy Price Guarantee (EPG) is currently set at £2,500 a year for the typical household and this was due to increase to £3,000 from April.
The Chancellor said this rise now won’t happen until July - by which point, analysts at Cornwall Insight expect energy bills will fall below £2,500, effectively cancelling out the EPG.
Pushing back the EPG increase will stop the typical energy bill rising by £500 - but households will still see their monthly cost go up, as the £400 energy rebate scheme is coming to an end.
The £400 discount had been split up over six months, with bill payers getting either £66 or £67 off their energy bill.
The final instalment is being issued to households this month - when you'll get yours depends on how and when you normally pay your energy bill.
The update from the Chancellor today comes after campaigners including Martin Lewis called for the April increase to be axed over fears it will push millions more people into fuel poverty.
