How to read your energy bill

Energy bills are notoriously difficult to read, so it's important you have a handle on how to read yours so you know how much you're spending. Our guide should answer all the questions you have.

Woman reading energy bill

Last updated: 23 October 2020

In this guide you’ll find information including:

  • What is shown on my gas and electricity bill?

  • How is my bill calculated?

  • How to convert gas units to kilowatt-hours (kWh)

  • What if I overpay?

  • What if I underpay?

  • Can I pay my gas and electricity bill online?

  • Why do I need to read my bill?

What is shown on my gas and electricity bill? 

Your bill shows you how much energy you’ve used, how much money you owe and other important information about your account, like your customer reference number and information about your tariff. The key parts are:

Consumption

Your bill will tell you how much gas and electricity your supplier believes you have used and how much you are being charged for each unit. 

Time period

This shows the dates for the period covered by the bill. Taken together with the figures given for consumption, the time period tells you how much gas or electricity you use during certain times of the year. You can compare this against previous bills to see how much your consumption fluctuates. For example, your gas or electricity bill may be higher during the winter months because you use more heating.

Actual or estimate

Your bill will state if the consumption is based on an actual reading or an estimate. If your bill is estimated, it will be based on previous typical usage. Estimates are used when your energy company doesn’t have an up-to-date reading of your meter. If you wish, you can read your meter and send the reading to your supplier to get a gas or electricity bill based on actual consumption.

If you use a smart meter, your meter readings will be sent to your supplier automatically and your bill should always be accurate.

Personal projection

This gives you an estimate of how much your energy is likely to cost over the next 12 months, based on your previous consumption and current plan. You can use this to compare other energy deals with your existing plan. This could help you see if you’re on the right tariff or if you should switch suppliers to get a better deal.

Which tariff you’re on

This is the name of your current plan. It affects how much you pay for each unit of energy as well as any standing charges. You can compare your current plan against others to see if you’re on the best one. You should also be given a tariff comparison rate, which makes it even easier to check how your energy compares to other market tariffs.

How you pay

This shows how you pay your energy bill. It could be:

  • monthly or quarterly when bills come in

  • by Direct Debit

  • on a prepayment meter as part of a pay-as-you-go plan

Most suppliers offer a discount if you pay by Direct Debit, so this is usually the cheapest option. However, if you struggle to pay your bills you may be better with a prepayment meter that lets you top up as and when you need to.

You can change how you pay for your gas and electricity by contacting your supplier. 

When your contract ends

This shows when your plan will end and whether you have to pay an exit fee if you cancel your contract before that date.

Your supplier should contact you at least 49 days before your existing tariff ends to tell you how much your energy will cost if you don’t choose another contract. In most cases, it will switch you to a standard tariff. These are more flexible as they don’t have a fixed end date or exit fee, but they’re often more expensive than fixed plans.

Meter reference number

These are the ID numbers of the meters supplying your household. There are two types of numbers: Meter Point Reference Number (MPRN) and Meter Point Administration Number (MPAN). You should check the number on your bill tallies with the one on your meter or you may end up paying for someone else’s electricity or gas. You may also need them if you want to switch supplier.

QR code

This is a handy way of finding out more about your energy bill and comparing deals. You need a QR code scanning app and a smartphone to use it. You should be able to get a suitable app, along with instructions on how to use it, via your smartphone's app store.

How is my energy bill calculated?

Your consumption for both gas and electricity is measured in kilowatt-hours (kWh) and you will be charged a fixed cost for each unit of energy you use.

This cost varies depending on where you live, how you pay for your energy and which supplier you use.

The rest of your bill is made up of:

  • Standing charges: This is the fixed amount your supplier charges for supplying your gas and electricity, and for managing your account.

  • Discounts: Most energy suppliers offer discounts if you have a dual-fuel plan, or if you pay your bills by Direct Debit. Any discounts are deducted from your bill.

  • VAT: This is a government tax added to your gas and electricity bill. VAT on energy is currently capped at 5% for domestic customers.

The amount you’re asked to pay also takes your existing balance into account. If you owe money to your supplier, the amount is marked as a debit. If you have previously overpaid and your supplier owes you money, the amount is marked as a credit.

How to convert gas units to kilowatt-hours (kWh)

Most gas meters record the volume of gas used in cubic feet or cubic metres, but energy suppliers send out bills which detail how many kWh of gas you’ve used. So, how do you convert a gas meter reading to kWh? Methods vary slightly depending on the provider, but your gas bill usually explains the precise calculation your supplier has used to convert gas units to kWh. The sum will be similar to the one outlined below

How to convert a gas meter reading to kWh

  1. Begin by reading your gas meter, ignoring any numbers that are shown in red. Then subtract the volume reading shown on your previous bill from the reading you just took. This gives you the volume of gas used since your last bill. 

  2. Take note of whether the meter measures in cubic feet (ft3) or cubic metres (m3) – this should be marked somewhere on the device.

  3. If your gas meter is in cubic feet, multiply the volume of gas used since your last bill by 2.83. This will give you the volume in cubic metres. If you have a metric meter that reads in cubic metres, you can skip this step.

  4. Multiply the volume in cubic meters by 1.02264 to correct for temperature.

  5. Multiply the temperature-corrected volume by the calorific value given on your bill – look for a figure between 38 MJ/m³ and 41 MJ/m³.

  6. Finally, convert the calorific value of the gas meter reading to kWh by dividing by 3.6.

How to calculate the cost of gas

Once you have converted gas units to kWh, you can work out how much your consumption should cost by multiplying the figure for kilowatt-hours by the unit price for gas shown on your bill. Don’t forget to allow for standing charges, discounts and VAT if you want to calculate the amount you will be billed.

How to calculate the cost of electricity

Thankfully, it’s much easier to calculate how much electricity costs as the meter readings are always in kWh. So you just need to multiply that by the unit price shown on your bill. Again, adding on standing charges and VAT, and subtracting any discounts. 

Using a gas or electric bill estimator

If the thought of all that maths leaves you cold, you could try an online utility bill estimator. Simply fire up your preferred online search engine and type in ‘electricity bill estimator UK’, ‘gas bill estimator UK’ or ‘energy bill estimator UK’ to see what’s available.

What if I overpay?

If you have overpaid on your energy, you have the right to a refund from your supplier, but this can be a long process. Many people prefer to let the credit sit in their energy supplier's account until the next payment is due. Suppliers will automatically reduce the next bill according to any credit that’s in a customer’s account, so the money doesn’t have to be claimed back. For example, if you overpay for gas during the summer when you use less heating, your supplier will apply that credit to your winter bill when energy costs tend to rise.

If you want to avoid overpaying on your energy bills, it’s best to send regular meter readings to your supplier so that you only pay for the energy you use.

What if I underpay?

You’ll usually be sent a back-dated bill for any energy you used but didn’t pay for during the period of underpayment. This is a practice known as back-billing.

Like overpaying, the best way to avoid underpaying is to regularly provide your energy supplier with meter readings and check your bill to see if you are paying the correct amount. Ofgem also has rules that govern back-billing, which state that energy suppliers are not allowed to demand payment for energy used more than a year ago except in special circumstances.  

Can I pay my gas and electricity bill online?

Possibly. People are increasingly choosing to make online payments when settling gas and electricity bills. This can usually be done via your supplier’s website or app. However, some consumers don’t receive gas and electricity bills or can’t use online payments systems. These include subscribers to PAYG prepayment plans who have to use a key or smart card to top up their meter and customers who have set up accounts with Direct Debit. The latter group does receive electricity and gas bills, but there’s no need for online payments.  

Other reasons to go online

Even if you don’t want to pay online, it’s worth looking at your supplier’s website or app. Often you can choose to opt for paperless billing. This is a green option where you view your bills and other account details online – you no longer receive a paper bill through your letterbox. You can usually print off these bills if you’re asked for a utility bill in your name as a proof of address. People with smart meters can also go online to see their energy use in real-time

Why do I need to read my bill?

Reading your energy bill allows you to:

  • Monitor your energy usage

  • Check you are being accurately billed

  • Avoid overpaying or underpaying for your gas or electricity

  • Stay up to date with changes to your tariff

  • Check if you could save by switching your energy supplier