Utility bills can be confusing things. They often contain a number of varying charges that have been added to your total energy use. This can make it extremely difficult to work out what it is that you’re actually paying for.
Here we take a look at what all the charges on your utility bills are and we investigate why they’re being paid.
Gas – 67%
Electricity – 58%
The biggest part of your energy bill is made up of your actual energy consumption during the period that you are being billed for.
This section of your charge will include the wholesale costs that your gas or electricity supplier had to pay to purchase this energy in the first place.
This section of your charge will also contain any profit margin that your gas or electricity supplier will be passing on to you, in order to make their business some money.
The supply costs of your energy supplier will also be contained within this section. This normally includes any costs that are associated with running the business, such as call centers or engineer call out services.
Gas – 16%
Electricity – 16%
This section of your bill is charged for the cost of getting your energy from the generator to your house. This means that it includes the cost of maintaining the network of wires and pipes that transfer your gas or electricity supply to your house.
Gas – 2%
Electricity – 4%
Costs associated with transmission fees are similar to those associated with distribution fees. Your transmission network varies depending on what region of the UK you are located in.
Gas – 5%
Electricity – 5%
Whilst you do not pay the full amount of VAT on your gas and electricity bills, you do still pay 5%. This percentage is capped for the time being, however they are subject to change depending on government policy.
Gas – 6%
Electricity – 11%
A portion of your energy bills also go towards certain government environmental schemes. The idea behind this is that these fees are going towards providing more sustainable alternatives to carbon-based energy.
Gas – 4%
Electricity – 5%
These fees included the costs of getting a meter installed or maintained and also the storage costs of gas.
More than half of all Britons are stuck on expensive default or standard variable tariffs, paying too much for their energy, often because they haven’t sought out a better deal or switched supplier in years.
The good news is that if you’re not locked into a fixed rate deal, you can switch at any time, without penalty. And your bill from your current supplier contains all the information you need, both to assess how competitive your current tariff is and to compare energy deals.
If you are locked into a fixed deal, your bill will also list the date it expires and when you’re eligible to switch.
Your bill will include a personal projection, the amount you’re forecast to spend on energy over the next year, should you stick with your current tariff. It will be based on your previous typical energy usage.
Additionally, the bill will display a figure known as the Tariff Comparison Rate (TCR). Intended to work like an APR does for loans, it shows you how much you’re spending per kilowatt hour of gas and electricity once all standing charges, discounts, and taxes are taken into account. The TCR makes it easy to compare tariffs.
When you compare energy deals, using an energy price comparison site like Simply Switch, you’ll be asked for the following information, which you can find on your bill.
You’ll also need your postcode to compare energy, but you likely don’t need an energy bill to tell you that.
Here are the other numbers you’ll see on your bill, what they mean and when you might have to use them: