Every household in the UK is to get an energy bill discount of £400 this autumn as part of a package of new measures to tackle soaring prices.
The poorest households will also get a one-off payment of £650 to help with the cost of living, chancellor Rishi Sunak said.
It follows warnings millions could be left struggling if energy prices rise again in October as expected.
Mr Sunak said he had offered “significant support” for the whole UK.
The package of new measures, worth £15bn in total, will be partly funded through a 25% windfall tax on oil and gas firms’ profits which have soared in recent months.
It comes a day after Sue Gray’s critical report into lockdown parties in Downing Street and follows intense pressure on the government to do more to help people with the cost of living crisis.
Announcing the support in the Commons, Mr Sunak said the government would also offer more targeted help to pensioners and the disabled.
“We know that people are facing challenges with the cost of living and that is why today I’m stepping in with further support to help with rising energy bills,” Mr Sunak said.
“We have a collective responsibility to help those who are paying the highest price for the high inflation we face. That is why I’m targeting this significant support to millions of the most vulnerable people in our society. I said we would stand by people and that is what this support does today.”
Earlier this week the UK’s energy regulator Ofgem said the typical household energy bill was set to rise by £800 in October, bringing it to £2,800 a year. Bills had already risen by £700 on average in April.
Ofgem warned that 12 million households could be pushed into poverty because of the cost of heating their homes.