A quarter of households in England and Wales are now living in fuel poverty, as the government looks set to miss its target of eliminating the problem by 2016.

Figures revealed today show that the number of homes who spent at least 10% of their income on gas and electricity has jumped from one in five to one in four over the last year.

According to the Guardian the rise in fuel poverty is largely down to huge prices rises announced by energy companies.

The paper said previous government projections estimated 4.1m households would be in fuel poverty, but those were made before the major price hikes by the big six energy companies.

The newspaper says it has seen the figures provided to the consumer watchdog Consumer Focus that show in England alone over five million homes are struggling to pay their fuel bills - having to spend 10% or more of their income to provide adequate warmth and light.

Michelle Mitchell, director of charity Age UK, said people were facing a "stark choice" this winter that could put their health at risk.

"Fuel poverty has a devastating effect on people's mental and physical well-being and cold can and does kill," she told the Daily Express.

"Households are cutting back on either heating or food to help make ends meet."

The paper said "millions" of people would be afraid to turn on their heating this winter because of rising energy bills.

The warnings come as the Institute for Fiscal Studies said that millions of people in the UK face a decade without meaningful increases in their living standards.

The UK is firmly in the worst period for changes in living standards since the 1950s and 60s, the think tank said.

A seperate study by uSwitch.com has shown that Wales is the fuel poverty capital of the UK, with almost a third of households there suffering.

The price comparison website said 32% of Welsh homes were fuel poor, while London was found to have the lowest level of fuel poverty, with 16% of households affected.

Rob Tolan, head of policy and research at Elizabeth Finn Care said price rises were having a "devastating" impact.

"Following the summer announcement of steep hikes in the price of gas and electricity by fuel giants, millions of people across Wales are anxiously worrying about how they will afford to keep warm this winter," he said.

"The rises will have a devastating impact on households and according to figures release by Uswitch this week, with almost a third of households suffering, Wales is the fuel poverty capital of Britain."

A spokesman for the Department of Energy and Climate Change said the government was committed to helping people, especially pensioners and those on low incomes, heat their homes more affordably.

"This year around 600,000 of the poorest pensioners will get £120 off their fuel bill under the Warm Home Discount," they said.

"Winter Fuel payments will be made this winter and if it gets really cold, emergency payments will be made to the most vulnerable. In the longer term, we’ll be helping people use less energy through the Green Deal, giving extra help to those who need it most.”