Alongside housing costs, your energy bill is likely to be one of your highest monthly outgoings. So what is the average energy bill in the UK? Are you paying too much? Let’s take a look.
What’s included in my energy bill?
Your monthly energy bill consists of your combined electricity and gas usage, unless you live in an electricity-only household.
According to figures from 2020, the average household in the UK uses 8.5-10 kilowatt-hours (kWh) of electricity and 33-38 kWh of gas each day.
If you live in an electricity-only household, you may find it more expensive to power your home as many electrical appliances, such as heaters, are more expensive to run compared to gas alternatives.
What can influence my bill?
The amount you pay for your energy can be influenced by a number of factors. Let’s take a look at six of the biggest influences on your bill.
1. The time of year
Your energy usage is likely to increase in winter. That’s because shorter days and lower temperatures probably mean you’ll spend more time with the lights and heating switched on.
2. The size of your home
It almost goes without saying but if you live in a large detached house, you’ll pay more in energy costs than someone who lives in a studio flat.
3. Appliances you use
Many electrical items will have an energy efficiency rating from ‘A’ (most energy efficient) to ‘G’ (least energy efficient).
The higher the rating, the less energy needed to use the product, which can mean a lower energy bill. It’s not just large appliances like washing machines or fridge freezers that have an impact. Consider smaller items too, such as light bulbs.
4. Energy efficiency of your home
Every home has an energy performance rating. If your home lacks cavity wall insulation, double glazing, or an efficient boiler, then it could attract a low rating.
Remember, should you wish to rent out or sell your home in the future, you’ll need an Energy Performance Certificate – so it’s worth paying attention to how energy efficient your home is.
5. Your energy tariff
The price you pay for the energy you use can vary wildly depending on the type of tariff you are on.
If you’re on a standard variable tariff, especially from a ‘big 6’ provider, it’s likely you’ll be paying far more than someone who switches their tariff regularly.
Tariffs can be fixed or variable, and costs differ across the country. This means there’s no true ‘cheapest tariff’ for everyone.
To ensure you’re on the best tariff, use a price comparison website to compare a number of different options. To help with this, it’s useful to understand roughly how much energy you use each month so you’ll get a more accurate figure as to how much you can save.
6. Whether you qualify for government help
To support those on low incomes, the government offers a number of schemes to help cover energy costs:
- The Warm Home Discount pays £140 towards your energy bill between October and March. To qualify, you must either receive the ‘Guarantee Credit’ element of Pension Credit or be on a low income and meet your energy supplier’s criteria. To find out more, see our article on how you can qualify for the Warm Home Discount.
- The Cold Weather Payment runs between 1 November and 31 March every year and pays £25 for each seven-day period that the average temperature in your area hits zero degrees Celsius (or below). To qualify, you need to be on Pension Credit, Universal Credit or Income Support. Read our guide for more information on who is eligible for the Cold Weather Payment.
- For those born on or before 5 October 1954, the Winter Fuel Payment pays between £100 and £300 to help with your heating bills. You’ll get the benefit if you receive the state pension or another social security benefit, excluding Housing Benefit, Council Tax Reduction, Child Benefit or Universal Credit. Visit the gov.uk website for more details on the Winter Fuel Payment.
What’s the average energy bill in the UK?
According to Ofgem data from May 2021, the average standard variable energy tariff costs £1,131 per year or £95 per month.
Meanwhile, the cheapest tariff in the market costs £941 per year or £79 per month.
This means that someone switching to the cheapest tariff will pay almost £200 less per year than someone on an average standard variable tariff, with the same usage.
Isn’t there a price cap to cut my energy bill?
Ofgem introduced an energy price cap in 2019, limiting the amount providers can charge customers. The cap was introduced following pressure from those suggesting many were inadvertently overpaying for energy. Ofgem increased its price cap in early 2021.
Because of the cap, those overpaying for energy and stuck on standard variable tariffs saw their bills fall.
However many consumer groups criticised its introduction, suggesting the cap makes consumers less likely to shop around for a cheaper deal.