The safeguard tariff, which protects around five million homes from being overcharged, will rise to £1,136 for dual fuel customers annually from 1st October 2018.
It follows a previous increase of £58 in April due to higher wholesale energy and policy costs to support low carbon forms of electricity generation.
Ofgem adjusts the level of the safeguard twice a year, based on a pre-defined methodology set by the Competition and Markets Authority to reflect the estimated underlying costs of supplying energy.
Chief Executive Dermot Nolan said: “Around five million households, including some of the most vulnerable, remain better off and are no longer overcharged for their energy, thanks to the safeguard tariff.
“Any price rise for customers is unfortunate. But while the level of the tariff will rise in October, these customers can be confident that this increase is justified and that their energy bills reflects the real cost of supplying gas and electricity. There are also better deals on the market for those who want to save even more money by switching.”
The regulator is also working on putting in place a price cap for the remaining 11 million homes on poor value tariffs by the end of the year following a consultation later this month.