How do I read my energy bill?

Reading an energy bill can be a mind-boggling task, with each bill containing so many numbers it’s difficult to understand what it all means. Having a good understanding of your bill can help you understand if you’re paying the right amount and that you’re on the right tariff. 

How is my bill calculated?

Firstly, in order to understand your bill, it is important to understand how it is calculated. 

Your bill is calculated based on how many units of energy you use. If your energy company have your previous meter reading, they will subtract this from the most recent reading to work out how many units you’ve used. If you don’t have a previous meter reading, then you will receive an estimated bill based on your previous usage or a standard rate. 

Electricity units are measured in kilowatt hours and for gas it’s measured by volume, this is then converted into kilowatt hours by your provider. You will then be charged according to the number of units you’ve used multiplied by the rate you are charged per unit, which will vary according to your tariff or pricing plan. 



What should be included in your energy bill?

Your bill will state how much gas and electricity (if you get your gas and electricity from the same supplier) you have used in kilowatt hours over the period since your last bill. As discussed earlier this figure may be the actual amount or estimated. 

There will be some differences depending on how you pay your bill. You can pay by direct debit, on receipt of your bill or use a payment card. If you pay by direct debit, this amount will be an estimate of how much you use. There may be a difference between the amount debited from your account and what you have used, this could mean you either owe money or are owed money. A total of your credit or debit amount will appear on the bill.

Your bill should also tell you the name of the tariff you’re on, if you could be on a cheaper tariff and details regarding your contract, including information regarding any exit fees. 

Citizens Advice have created a useful tool which contains annotated examples of each of the Big Six’s energy bills, explaining what each part of them means, which you can find here

Is this information useful?

Understanding what this information means can help you to understand if you could be saving money on your energy bills. 

Information on your usage may help to identify that you’re using more than you’d expect and information regarding your credit or debt amount can show if you are paying the right direct debit amount. Ultimately you can use the information in your bill to conduct a comparison with other suppliers and see if you could be paying less. So being able to read an energy bill is certainly a skill that pays!

 

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