One in eight households in England will struggle to pay their fuel bills for heating draughty homes in 2021, official projections show.

Figures from the Department for Business, Energy and Industrial Strategy suggest the proportion of families in fuel poverty will fall from 13.4% or 3.18 million homes in 2019, to 12.5% or 3 million homes in 2021.

But nearly half of low-income households are still living in energy-leaking homes, with campaigners warning the rate of improvements is well below what is needed to lift people out of fuel poverty by a target date of 2030.

The figures use a new metric for fuel poverty, which measures the households that would be pushed below the poverty line by housing costs and the energy bills needed to have a warm, well-lit home, and who live in properties with low energy efficiency.

The Government has set targets to improve the energy efficiency of homes that households in fuel poverty live in.

The target aims to ensure that “as many fuel-poor households as reasonably practicable” achieve a minimum efficiency rating of Band C by 2030, with interim goals of Band E by 2020 and Band D in 2025.

The latest figures suggest 180,000 households are being brought out of fuel poverty between 2019 and 2021, around 90,000 a year, driven by improvements to energy efficiency that lift properties up to a rating of C or above.

By this year 52.4% of low-income households will be in Band C energy-efficient homes or above, compared with 47.8% in 2019, as properties get insulation, more efficient boilers and other energy saving measures, the figures show.

The UK has the most energy-leaking housing stock in western Europe, which is a national embarrassment

Campaigners warn that to meet the target to lift all fuel poor households up to Band C by 2030, and end fuel poverty, the number of homes being improved will need to rise to around 300,000 a year in the 2020s.

Increasing the energy efficiency of homes makes them cosier to live in, improves health, cuts fuel bills and helps tackle the climate-warming greenhouse gas emissions from buildings.

Ed Matthew, campaigns director at climate change think tank E3G, said: “The UK has the most energy leaking housing stock in western Europe, which is a national embarrassment.

“Successive governments have failed to fix it, leading to high energy bills and thousands of preventable deaths from those living in cold homes.

“This Government now has a number of schemes in place to insulate low-income homes but to meet their legal obligation to end fuel poverty by 2030 they need to triple the number of households being helped every year.

“This can end the social blight of fuel poverty, cut carbon emissions and create green jobs across the country.

This year alone we are installing green upgrades to the homes of over 50,000 low-income households, with total spending on energy efficiency measures in buildings rising to £1.3 billion in the upcoming financial year

“Rishi Sunak must now ensure the Treasury puts the long-term investment in place to fulfil this prime opportunity to build back better.”

The figures also project that the average fuel poverty gap – the reduction in energy costs needed for a household not to be in fuel poverty – will be £200 in 2021, down in real terms from £216 in 2019.

The overall gap for all fuel-poor households together is projected to be £599 million in 2021, down 13% in real terms from £687 million in 2019.

A Government spokesperson said they were continuing to make significant progress in tackling fuel poverty.

And they said: “We are committed to ensuring nobody goes cold in their own home, which is why we have recently extended the energy price cap and launched a new fuel poverty strategy for England to drive up energy efficiency.

“This year alone we are installing green upgrades to the homes of over 50,000 low-income households, with total spending on energy efficiency measures in buildings rising to £1.3 billion in the upcoming financial year.”

A spokesperson for the End Fuel Poverty Coalition said: “These figures are the first under the new measurement for fuel poverty and show the scale of the challenge facing governments – both at a national and local level.

“While any predicted reduction in fuel poverty is to be welcomed, we are concerned that the reduction in Covid financial support later this year will offset any improvement predicted.

“We also need to see continued and renewed emphasis on delivering policies that will end fuel poverty as quickly as possible.”