In this guide you'll find answers to questions including:
What is a utility bill?
How often will I receive a bill?
What information will I find on my utility bill?
Utility bill example: what makes up your charges?
How much is an average gas bill per month?
Can I use my electric and gas utility bills to save money?
What other information will you find on your utility bill?
What can I do if I’m struggling to pay my utility bills?
Utility bills cover the services we use in the home on a daily basis, including broadband, water supply and – of course – gas and electricity. A gas and electric utility bill is a statement that shows a breakdown of all the charges incurred as an energy customer.
The purpose of the bill is to provide payment options, showing how much is owed for the billing period. Although this sounds simple, there are several parts involved which we’ll outline below.
Bills are issued by your energy supplier on a monthly or quarterly basis, depending on how often you make payments. These days, increasing numbers of suppliers are switching to paperless billing, which means you need to regularly log into your account online to view your latest bill.
Diving into the fine print, you’ll see that your utility bill is broken up into several sections. According to Ofgem regulations, it must provide some basic, standard information about your tariff and energy use. Here are some of the key points you’ll see listed:
Lists the name of the account holder, the billing address, and other basic identifying details.
This lists the name of your current plan or tariff. It reveals whether you’re on a fixed or variable rate tariff, who your supplier is, and the end date to any contract if you’re on a fixed-rate deal.
Unless you’ve been with your supplier for less than 12 months, this will show the exact cost of your energy consumption over the past year – use it to provide an accurate quote when looking into switching tariff or supplier.
Your household energy use is displayed in kilowatt-hours (kWh). Essentially, you’ll be charged for each kWh used. Those who receive a combined utility bill for gas and electricity will see two sets of figures here, breaking down consumption for each type of fuel.
Look out for a letter next to the meter readings: ‘C’ indicates you supplied the meter reading, while ‘A’ will appear if someone came to read the meter on the supplier’s behalf. Look out for ‘E’ – estimated – which means the bill may be inaccurate and could lead to a bill shock if you’ve been consuming more energy than you’re being billed for.
Clearly displays whether you receive a bill on a monthly or quarterly basis, and what exact period the bill covers. You should find this near the amount of energy you’re being charged for.
This is the part that everyone skips down to first, and it should be clearly displayed on the front page of the bill for easy reference. It’s important to note that the amount owed could be a credit if you’ve overpaid by direct debit – a common occurrence during the summer months when you’re building up credit ahead of the more expensive winter ones. Whether it’s credit or debt, you’ll see where you stand with your account.
You’ll see a summary of your contract or tariff, including the end date of your contract (if fixed) and any cancellation fees should you decide to switch to a different tariff. Remember, exit fees no longer apply in the final 42-49 days of your fixed-rate tariff, and your supplier should give you notice when you enter the ‘switching window’ to give you time to switch to another tariff.
While the supplier may offer to switch you to another of its tariffs, these may not necessarily offer the best deal – before committing, take the time to use an independent switching site like Money.co.uk to see if you could get a better tariff with another supplier.
When you pay your utility bill, you pay a single amount. However, that amount is broken down to cover a variety of different costs. Here’s a typical utility bill breakdown so you can see where your money goes. We’ve used the latest figures provided by Ofgem from August 2020, breaking down the percentages of a typical electricity bill – a gas bill is similar, but wholesale costs are larger (46%), while environmental costs are much smaller (just 2%):
|Cost||% of bill||Description|
|Wholesale energy||34%||The cost of the actual electricity that you’ve used.|
|Network costs||22%||The cost of delivering electricity and gas into your home. The transmission network will depend on your region. It also covers the cost of getting the energy from point A (the generator) to point B (your house). It pays for maintaining the network of electricity wires and gas pipes throughout.|
|Operating costs||17%||Covers your supplier’s costs, which can range from engineer callout services to inbound customer service centres.|
|Environmental and social obligation||23%||These fees help pay for more sustainable, low-carbon energy sources. Some examples of environmental schemes include: Community Energy Saving Programme, Feed-in Tariff scheme, Carbon Emissions Reduction Target, and The Renewables Obligation.|
|VAT||5%||VAT on electricity and gas is currently capped at 5%, subject to change depending on future government policy.|
|Miscellaneous||2%||These costs cover such elements as installing new meters.|
Based on government statistics, in 2020 the average annual gas bill was £557, based on a household consuming 13,600 kWh/year of gas. This translates to around £46.50/month.
The average electric bill came to £707/year based on a consumption of 3,600 kWh in 2020 – that translates to an average monthly electric bill of around £59.
Yes, particularly if you haven’t switched energy suppliers or tariff in recent years, as you’ll almost certainly be stuck on your supplier’s standard variable tariff. These are usually the most expensive options, so it’s important to look at your bill carefully to see if cheaper options are available.
Your utility bill will list the type of tariff you’re currently on, so you can see if it’s a fixed or variable rate. If you do have a fixed tariff, the bill will list the expiration date so you can see clearly when you’re eligible to switch.
Look at the bill to find the personal projection. This shows the amount that your household is forecasted to spend on energy throughout the next year, based on your past usage and current tariff. This gives you some idea of a figure for comparison.
The bill may also show you a useful figure called the Tariff Comparison Rate (TCR). If you’re familiar with an APR figure given for bank loans, you’ll see that the TCR works in the same way. It makes it easier to compare tariffs because it shows you exactly how much you’re spending per kilowatt hour of gas and electricity. The TCR factors all discounts, taxes and standing charges into this figure for a more accurate comparison.
Armed with information like the personal projection and TCR, you can then think about switching suppliers. Using an energy price comparison tool, plug in your annual consumption in kilowatt hours as well as any other relevant details about your current tariff. You’ll also need to enter your postcode to see what’s available in your region.
UK utility bills also display a series of numbers, which are important to help you identify your account:
This is simply a number your energy supplier uses to identify the account. If you want to ask questions about your bill or lodge a complaint with the provider, you’ll need this number for reference.
There will also be a Meter Point Administration Number (MPAN) which is used to identify your meter. It’s 21 digits in length and might be requested if you want to switch suppliers or change supplier when you move to a new house.
In addition, look out for the following:
Suppliers are required to include any details of discounts, premiums or incentives that apply to your tariff. These are usually applied to tariffs where the customer pays by direct debit.
You should also be given contact details in the case you run into problems with your energy supply or need to report an emergency.
Energy providers are also required to include a reminder on each bill that customers can switch suppliers. This bit of information will include basic advice regarding how to switch.
Keep in mind that although this switching information is required, most energy providers won’t push you to do so and will only recommend their own cheaper tariffs.
If you own or manage a company that has a business energy tariff, look out for additional costs: VAT is 20% instead of 5%, and you’ll be charged a climate change levy as well as view information about wholesale costs, plus both distribution and transmission use of system charges.
In the first instance, contact your energy supplier who will be keen to provide any assistance it can, whether that’s moving you to a more affordable tariff or on to a prepayment meter to help you avoid falling into energy debt, setting up a practical debt-repayment plan or helping you investigate potential help in the form of government payments.
Last updated: 26 April 2021