Around four million households on prepayment meters are expected to save £80 a year on energy bills.
Ofgem has announced a temporary price cap which will come into effect in April.
It was one of the measures recommended by the competition watchdog following a two-year investigation of the energy market.
The levels of cap will vary for electricity and gas, by meter type and region, with prepayment customers expected to see reductions in their gas bills of around 10% to 15%.
Those who use electricity to heat their homes will also see similar benefits.
It will be updated every six months and is expected to stay until 2020 when the rollout of smart meters is set to be completed.
Dermot Nolan, Chief Executive of Ofgem said: “We want all consumers to enjoy the benefits of a more competitive energy market, regardless of their circumstance. Customers who prepay for their energy are denied the best deals on the market available to those using other payment methods. They are also more likely to be in vulnerable circumstances, including fuel poverty.
“This temporary cap will protect these households as we work to deliver a more competitive, fairer and smarter market for all consumers.”
As of December 2015, there were 4.5 million prepayment electricity accounts and 3.5 million gas accounts.