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The UK’s poorest households are being ‘priced out’ of heating their homes properly, according to a new report from Barnardo’s.

The children’s charity said the country’s poorest families were scrimping on heat by as much as £450 a year. Barnardo’s said poor families need to spend an average of £1,165 a year to ‘adequately’ heat their homes. Those with the lowest incomes are spending just £723, creating a ‘fuel gap’ that is potentially detrimental to families’ health and well being, according to the charity.

The ‘Priced out’ report also revealed that an increasing number of low-income families are being forced to use pre-payment meters when they get into debt with power firms. Energy paid for through pre-payment meters is more expensive than power bought in other ways, and can add up to £80 to a family’s annual energy bill.

The report noted that many families struggling with fuel costs will not benefit from the recent modest falls in energy prices as many are locked into to fixed tariffs which means they will not benefit from the reductions. The ‘big six’ energy firms recently announced price cuts of around 5% having introduced increases of up to 19% in 2011.

EDF Energy announced last week that its operating profits shot up by 8.5% to £1.6 billion last year. This works out to £427 for each of the 3.7 million UK households the firm serves. Ofgem is considering introducing a cap on energy prices after the cost of fuel has doubled since 2002. The average household now spends £1,250 on gas and electricity.

Anne Marie Carrie, chief executive of Barnardo’s, said:‘If we’re serious about tackling child poverty then we need to get serious about tackling fuel poverty, too. Families should never have to choose between whether to heat their homes or put food on the table for their children.

‘Many of the families Barnardo’s works with are bearing the brunt of companies’ unfair tariffs because they are using pre-payment meters to pay off their debt and to pay for gas and electricity. Effectively these families are being penalised by their payment method at a time when they need the most financial help.’

The Barnardo’s report laid out the following recommendations to government and the ‘big six’ energy providers:

• Energy companies should bring down pricing for pre-payment meter tariffs so that they match online and direct debit payment tariffs

• Energy companies should take responsibility for ensuring that customers on low incomes or in debt are on the lowest possible tariffs and the UK government should legislate for this if companies fail to comply

• The UK Government should bring forward its requirement on private landlords to make their homes energy efficient

• The UK Government should replicate the Welsh Assembly Government’s approach by including a specific target in its strategy to end child poverty by 2020 that commits to tackling fuel poverty

• Public Health England and local authorities should monitor the effects of fuel poverty on the health of children and families