In addition, an £800 million grant was given to the Warm Front Scheme, which was created to help reduce fuel poverty in 400,000 of England's poorest households.
Discussing the new funding, energy minister Malcolm Wicks said: "Millions of homes have been lifted out of fuel poverty over the past ten years but as fuel bills have increased it's more important than ever that people facing difficulty paying their bills access the full range of help that's out there.
"Eradicating fuel poverty will be very challenging, but it is a challenge the government and the energy suppliers are committed to."
A recent report by energywatch claimed that many energy suppliers are exploiting poor customers in the UK by charging prepayment meter users an extra £195 a year.
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