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How to read your energy bill

Martin Lane Photo
Written by Martin Lane, Managing Editor

31 January 2019

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

Why read your bill?

Reading your energy bill allows you to:

  • Monitor your energy usage

  • Check you are being accurately billed

  • Avoid overpaying on your gas or electricity

  • Stay up to date with changes to your tariff

  • Check if you could save by switching your energy

You could miss out on cheaper deals or end up being overcharged for your energy usage, if you ignore your bills.

How is it calculated?

Your 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 dual fuel, or if you pay your bills by direct debit. Any discounts will be deducted from your total cost.

  • VAT: This is added at the end of your bill to give a total cost for your gas and electricity. VAT payments are currently capped at 5%.

What else is on your bill?

Your bill also includes important information about your account, like your customer reference number and information about your tariff:

Time period

This tells you the dates of your energy usage, so that you can see how much your gas or electricity costs during a certain period of time.

This is useful to see if you use more energy at certain times of year, for example your gas bill may be higher during the winter months because you use more heating.

If you owe money to your supplier, the amount is marked as debit. If you have overpaid for your energy and your supplier owes you money, the amount is marked as credit.

Actual or estimate

If your bill is estimated, it will be based on your previous typical usage. Estimates are used where your energy company does not have an up to date meter reading from you.

You can read your own meter and send the reading to your supplier to get an actual bill.

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 tariffs with your existing company and with other suppliers, to make sure you get the best deal.

Which tariff you are on

This affects how much you pay and lets you compare cheaper deals with your energy company.

You should also be given a tariff comparison rate, which lets you see how your energy compares to other market tariffs.

How you pay

You can pay your energy bill:

  1. Monthly or quarterly

  2. By direct debit

  3. On a prepayment meter

Most suppliers offer discount for paying 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

You can find out when you can leave your current supplier and whether you have to pay an exit fee if you cancel your contract before the end date.

Your supplier should contact you at least 49 days before your existing tariff is due to end, to confirm which deal you can move to.

Standard tariffs do not have a fixed end date, so you do not pay an exit fee. They are often more expensive, but they give more flexibility to switch.

Meter reference number

Your Meter Point Reference Number (MPRN) and Meter Point Administration Number (MPAN) let you find the energy meters supplying your property.

You need them to find out which meter you are being charged for, and you may need them if you want to switch supplier.

QR code

You can scan this with a smartphone camera if you have one, to find out more about your energy bill or to compare deals.

You need an app to do this, so visit your smartphone's app store and search for a QR code scanner.

What if you 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.

Your credit typically sits in your energy supplier's account and is then used towards your energy bill when a higher payment is needed.

For example, if you overpay for gas during the summer when you use less heating, your credit can be used to pay for higher use during the winter.

Regular meter readings are the best way to avoid overpaying on your energy bills, so you only pay for the energy you use.

What if you underpay?

You could eventually be billed for the money owed during the period you were underpaying. This is known as back billing.

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.

You could also avoid back billing if you can prove that the fault is with your energy company, for example if you provided correct meter readings but your bills were wrongly calculated.