5.5m homes spend over 10% of income on fuel, and bills will rise further to fund new power networks

Figures show a huge rise in UK households in fuel poverty, even before expected rises in the price of gas and electricity, and charities predicted that this winter would see millions more people struggling to keep warm at home.

The Department of Energy and Climate Change statistics show 700,000 more UK families fell into fuel poverty in 2009, bringing the total to 5.5 million — one in five of all households. In the UK, fuel poverty is when a household needs to spend more than 10% of its income on fuel in order to heat its home to an adequate standard, and have hot water and run lights and appliances.

The department admitted that 100,000 more families in England alone were expected to go into fuel poverty this year.

The figures came less than a week after British Gas said its gas prices will rise by an average of 18% and electricity bills by 16%. Scottish Power has also raised its gas prices by 19% and electricity by 10%, while other power companies are expected to follow suit, blaming wholesale gas prices.

The government has admitted that bills will have to rise additionally to pay for a major rebuilding of the UK's power networks.

Michelle Mitchell, charity director at Age UK, said it was astonishing that help for poorer households through the Warm Front subsidy scheme was being phased out despite "scandalous" power bills. "The promised solutions contained in the [government's] Green Deal don't come into force until late 2012 – too late for the millions of people struggling to heat their homes this winter," she added.

Dave Timms, campaigner at Friends of the Earth, said the department's figures showed the necessity of putting more money into the insulation of homes to ensure no energy was wasted.

"It is a national disgrace that millions of people were suffering in cold homes they can't afford to heat – insulating them properly would help vulnerable households save money on fuel bills and stay warm and healthy," he said.

Climate change minister Greg Barker admitted the fuel poverty figures were unacceptable but blamed past Labour policies and the state of the UK's housing.

"The fact is that homes in the UK are amongst the most expensive to heat in Europe, yet we don't have the most expensive gas and energy prices," he told BBC Radio 4's You and Yours programme.

"Next year [we start] the most ambitious home improvement since the second world war, where we're not just putting a bit of lagging in people's lofts, but [will] transform, on a whole house basis, millions of homes over next decade."

The Green Deal promises to insulate all homes, with the cost being covered by savings from future energy bills. But the government is phasing out Labour's Warm Front programme which provided grants for draughtproofing and help with energy bills.

The department's figures of an extra 100,000 in fuel poverty hides the true hardship caused by rising fuel prices for millions of the UK's poorest people, according to Consumer Focus.

Spokeswoman Audrey Gallacher said this was because the department's predictions did not take into account that four of the big six energy providers have yet to announce expected price increases.

"If these [new price rises] are in line with British Gas and Scottish Power, around 12 million people, or 6.4 million British households, are likely to be in fuel poverty," she said.

Gillian Guy of Citizens Advice said the figures meant at least 5.5 million people in the UK were already living in freezing conditions through self-rationing and disconnection – with private tenants among those at highest risk of fuel poverty.

"Living in a cold home has a devastating impact on people's physical and mental health," she said, while others pointed out that the NHS spent £859m each year treating cold-related illnesses due to poorly insulated homes.

Shadow climate change minister Luciana Berger said that the government had removed support for households by scrapping Labour's Warm Front Scheme, which provided two million households with heating, and reducing winter fuel payments by up to £100: "Ministers must act now to deliver warm homes, rather than leaving millions shivering."