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A government scheme to help poor families with heating bills is reaching just 3 per cent of those eligible because big energy companies are failing to commit enough to the programme, according to a leading charity.

Save the Children says that, while 800,000 of the poorest families qualify for a £120 discount on fuel bills under the warm homes discount scheme, a huge funding shortfall means that only 25,000 families will get it. It says that companies need to promote the scheme better to increase awareness of the help available.

Justin Forsyth, the charity’s chief executive, said: “It’s unacceptable that 97 per cent of the UK’s poorest families who need help heating their homes this winter will get nothing because energy companies have not put up nearly enough money. Without this help the choice for parents is stark: cut back on food, get into debt or risk their children’s health because they can’t afford to keep them warm.”

Research by the charity suggests that more than half of the low income parents of children under 16 surveyed were worried that their children’s health would suffer because their house would be too cold this winter. Nearly a third of those polled said they would not be able to afford their winter energy bills and almost half said they were considering cutting back on food in order to pay their energy bill. Fewer than one in 10 of the parents surveyed said they were aware of, and were planning to apply for, the warm homes discount.

The charity is calling on the “big six” energy companies to ensure that families eligible for cold weather payments receive the warm homes discount. It also says that energy companies should transfer all pre-payment meter customers and customers in debt on to the cheapest tariff. It also urges the government to support and invest in energy efficient measures to reduce fuel poverty for low income families.

Christine McGourty, director of Energy UK, said: “Far more than 25,000 families will get help from their energy companies this year. Almost £180m was spent last year on voluntary schemes to help nearly 2m of the most vulnerable customers, and that figure will increase to £250m this year. Following consultation, the government decided who will benefit from core funding under the new warm home discount scheme, and those customers will get an automatic discount off their electricity bill without needing to apply for it. A wider group of 650,000 people by 2013/14 will also benefit.

“All the major energy companies have been writing to their customers this winter promoting the help that is available and all of them fund the free and independent Home Heat Helpline. It’s important that families stay warm this winter and anyone who is worried about paying their energy bill should get in touch with the helpline.”

Additional reporting by Guy Chazan