Explain My Energy Bill

Understanding your energy bill can feel confusing, with various charges, tariffs, and usage details included. This guide will break down the key sections of a typical UK energy bill, helping you understand what you’re paying for and how to manage your costs effectively.

1. Key Sections of Your Energy Bill

Most UK energy bills contain the following key elements:

a) Account Summary

This section provides an overview of your account, including:

• Your balance (whether you’re in credit or owe money).
• Payments received and any outstanding amounts.
• The date of your last payment.

b) Energy Usage

Your bill will show how much electricity and/or gas you have used during the billing period. It may include:

• A graph comparing your usage over different months.
• Your usage in kilowatt-hours (kWh).
• Whether your reading was an estimate or an actual meter reading.

c) Tariff Information

This section explains your current tariff, including:

• The name of your tariff.
• The unit rate (how much you pay per kWh).
• The standing charge (a daily fee for having an energy supply).
• The contract end date (if applicable).

d) Charges and VAT

Your total energy cost is calculated based on:

• Your usage multiplied by the unit rate.
• The standing charge for the billing period.
• VAT (5% on domestic gas; no VAT on domestic electricity in Great Britain from 1 October 2026 to 31 March 2027).

2. Estimated vs. Actual Readings

If you have not submitted a meter reading, your provider may estimate your usage. This can sometimes result in higher bills. Submitting regular meter readings or using a smart meter ensures you are billed accurately.

Reading an EDF, E.ON, British Gas or Octopus bill

Every supplier lays its bill out differently, but each one must show the same core information. Look for:

• Your tariff name and end date, and any exit fee if you’re on a fixed deal.
• Unit rate in pence per kWh, and standing charge in pence per day, for each fuel.
• Meter readings, marked as actual (A) or estimated (E). If they’re estimated, send a reading.
• kWh used in the billing period. For gas, this is converted from your meter reading.
• VAT. From 1 October 2026 to 31 March 2027 there is no VAT on domestic electricity in Great Britain. Gas is still charged at 5%.
• Your MPAN (electricity) and MPRN (gas): you’ll need these if you switch.

How your energy bill is calculated

For each fuel, your bill is: kWh used × unit rate, plus days in the period × standing charge, plus any VAT. Gas meters record volume, so your supplier converts the reading to kWh first using the calorific value shown on your bill (see GOV.UK).

If you’re on a default tariff, the unit rate and standing charge can’t be higher than Ofgem’s price cap for your region and payment method. See our energy price cap per kWh guide. For where the money goes, see our breakdown of the £1,723 price cap, from wholesale costs to network charges.

Struggling to pay your energy bill?

Contact your supplier as early as you can. They must help you if you ask, for example with a repayment plan. See what to do if you get behind on your energy bills.

3. Ways to Lower Your Energy Bill

• Switch to a cheaper tariff – Compare deals regularly to find the best rate.
• Use energy-efficient appliances – LED bulbs and smart thermostats can reduce costs.
• Check for government support – Schemes like the Warm Home Discount and Winter Fuel Payment can help eligible households.

Conclusion

By understanding the details of your energy bill, you can manage your energy costs more effectively and avoid overpaying. Always review your tariff and energy usage to ensure you’re getting the best deal.