Understanding your utility bill

Utility bills explained

Gas and electricity bills, which tell you how much energy you’ve used and how much you have to pay for it, shouldn’t be complicated documents.

However, too many Which? members have told us that they don’t find their bills particularly easy to understand, Which? Researcher James Tallack explains them in our video guide.

There’s no legal requirement for suppliers to send bills at specific intervals, but most customers should receive a bill at least every quarter. If you haven’t received a bill for more than a year then you cannot be charged for energy used during that period.

What all utility bills should contain

Bills – whether for gas or electricity – should always be dated and contain the following information (usually on the first page of the bill):

• Your name and address
• Your customer account or reference number (always quote this when you contact your supplier)
• The name of your supplier and its contact details
• How much you need to pay (including any money owed from previous bills) and when you need to pay by

More detailed information

The following more detailed information about the amount of energy you’ve used is often found on a separate page of the bill

• Billing period – the period in which you used the energy you’re being charged for
• Meter readings – the difference between the previous and latest reading is the amount of energy (measured in kilowatt hours or kWh) you’ve used
• The amount your supplier is charging you for each kWh of gas or electricity. If you pay a standing charge (which covers things like meter readings and the cost of keeping you connected to the network) you’ll pay a single rate; if not then you will pay a higher price for a given number of units and then a lower rate thereafter
• Meter number – if your supplier has changed your meter during the billing period you’ll see readings for two different meter numbers

Meter readings

One of the most important things to look out for is whether the bill is based on a meter reading taken by either you (usually indicated by the letter ‘C’ for customer) or your supplier (‘A’ for actual), or an estimated reading calculated by your supplier (‘E’).

Estimated readings

It is always best to only pay for what you have actually used, so if you see that your bill is based on an estimated reading then you should read your meter yourself straight away and provide this information to your supplier as soon as possible so that it can send you a revised bill.

You don’t have to wait for an estimated bill to provide your supplier with a meter reading. In fact, it’s a good idea to get into the habit of reading your meter regularly – say, once every couple of months. This is particularly useful if you pay by monthly direct debit (see below) as it will give your supplier a better indication of how much energy you’re using.

Paying energy bills by direct debit

Many customers choose to pay for their energy by monthly direct debit. This means that your supplier will work out how much you spend on energy in a year and divide this up into equal monthly payments. Suppliers usually offer a discount to customers who pay this way because their accounts are easier to manage.

Over and underpaying with direct dedbit

If you pay by monthly direct debit then it’s important to check your bills to make sure your supplier is asking you to pay the right amount. Because energy use is not equal throughout the year, direct debit customers effectively underpay in winter and overpay in summer.

It is normal to find your account a little bit in debit at the end of the colder, darker months of the year and in credit at the end of at the end of warmer, lighter periods, as everything should balance out over the course of a year. However, if you think that you are in debit or credit by too much then contact your supplier and ask them to explain how your direct debit amount is calculated.

See our guide on how to deal with a disputed bill for guidance on dealing with utility bill discrepancies.

Utility bills checklist

• Avoid inaccurate estimated bills by reading your meter on a regular basis and providing the readings to your supplier (who will be able to tell you how to do this) – we suggest at least once every three months.
• If you pay by direct debit and your account is showing a large credit or debit then contact your supplier to ensure that your monthly payment isn’t too high or too low.
• Energy efficiency grants are available for improvements to your home, which will save you money and reduce carbon emissions. Contact the Energy Saving Trust for more information.

Better energy supplier deals

• If you’ve never changed your supplier then you could save a significant amount by switching. And even if you have then it’s worth checking to see if you’re still getting a good deal.
• Also contact your current supplier to find out if they can offer you any ways to reduce your bill – such as paying by monthly direct debit and managing your account online.
• Use the free, impartial Which? switching service www.switchwithwhich.co.uk to find the best deal in your area. You just have to provide a few basic details and we’ll take care of the rest. The process normally takes about six weeks.
• Getting your gas and electricity from one supplier (known as ‘dual fuel) and paying by monthly direct debit is almost always the cheapest option.
• Read our guide on dealing with energy suppliers if you have a problem or want to know more about your rights.

Tariffs

• If you go for an online tariff you won’t receive bills through the post, but you’ll often get a substantial discount for managing your account this way.
• Fixed-price tariffs guarantee the price you pay for your energy for a set period of time and give peace of mind for those worried about future price rises. However, they can be expensive (up to 20% more than non-fixed tariffs) and there may be a fee to leave the tariff early.
• Off-peak electricity tariffs, such as Economy 7 and Economy 10, are best suited to people who use more than 60% of their electricity late at night, such as those who heat their homes using storage heaters.