More than four million prepayment meter customers will no longer be charged more for energy under plans to be announced during the Spring Budget this week.
The types of households placed on prepay meters are on low incomes - but they end up paying more because energy firms pass on the costs of managing the meters.
But from July, prepay customers will no longer pay more than direct debit households, in a move the Treasury says will save households £45 a year.
A full announcement is expected this Wednesday when Chancellor Jeremy Hunt delivers his Budget.
currently pay more on average than Direct Debit customers because of firms managing the meters passing on costs to users.
Mr Hunt said: "It is clearly unfair that those on prepayment meters pay more than others. We are going to put an end to that.
"From July four million households won't pay more than those on Direct Debits. We've already cut energy bills by almost half this winter, and this latest reform is proof again that we're always on the side of families."
The Treasury estimates the change will cost the taxpayer £200million.
There is currently a six-week ban on forcibly installing prepayment meters after an investigation by The Times claimed British Gas used debt collectors to break into the homes of vulnerable customers to install meters.
British Gas suspended the future instalments, before Ofgem then asked all suppliers to follow suit earlier this month.
The ban - which ends on March 31 - includes prepayment meters being installed under warrant and customers being switched over remotely if they have a smart meter.
A recent report from Citizens Advice found an estimated 3.2 million people could not afford to top-up their energy meter last year.
It said more than one in five prepayment meter customers cut off in the past year spent at least 24 hours without gas or electricity, leaving them unable to turn the heating on or cook a hot meal.
Based on Ofgem figures, Citizens Advice estimates that around 600,000 people were forced onto a prepayment meter because they couldn't afford their energy bills in 2022.
