Working Out The Average Energy Bill For UK Households

The average households spends around £602 per year or £50.17 per month on gas and £526.23 per year / £43.86 per month on electricity. How does your energy spending measure up against this national average energy bill? If your spending is much higher, don’t worry. The Switch-Plan team can drive down your energy bill, potentially saving you hundreds of pounds per year. If your energy spending is below average, we can probably *still* help you to save money.
Last update: May 2021

Understanding the average energy bill can help you to put your own spending into perspective, and choose the cheapest energy supplier. While this may be scary at first, it’s the best way to gauge how much you’re wasting on the wrong tariff and how much you could save by switching. So, let’s take a look at the UK average energy bill…

How much is the average energy bill in the UK?

The better you know the average UK gas and electricity bill, the better you can understand your own spending and usage. This can help you to determine whether you’re paying too much, and it’s statistically likely that you are paying too much, because of your usage or your energy tariff… or both.
Let’s break down the average monthly energy bill by utility.

What’s the average gas bill per month?

Many of us rely on gas to heat our homes and cook our meals. But how much does the average household use? And how much are they paying for it. Gas and electricity rates are constantly in flux. However, we can use the following formula to calculate the average gas bill:

  • The average UK household consumes 12,000 kWh of gas per year
  • The current median average unit cost per kWh of gas is around 3.80p
  • Daily standing charges for gas range greatly from 10p to 80p, so 40p is a decent median average
  • First we multiply the cost of a unit of gas (£0.038) by 12,000 to work out the average unit spend. This comes to £456 per year
  • Next, add the average cost of standing charges. We can work this out by multiplying 0.40 by 365 to get £146
  • We add these together to get £602 per year
  • We divide this number by 12 to work out the average monthly cost of £50.17

What’s the average electricity bill per month?

Dual fuel households generally use much more gas than electricity. This is because heating costs make up a significant proportion of our energy bills (as much as 40%). Nonetheless, our reliance on electricity to live and work means that we can’t afford to pay through the nose for it.
We can use the same formula as we just did for gas to calculate the average UK electricity bill.

  • The average UK household consumes around 2,900 kWh of electricity per year
  • The median average unit cost of electricity is around 14.37p per kWh
  • Daily standing charges range from 5p to 60p so we can use 30p as a safe median
  • Again, we multiply 0.1437 by 2,900 to work out the average annual unit spend (£416.73)
  • To this we add the average cost of standing charges, multiplying 0.30 by 365 to get £109.50
  • This makes the average annual electricity bill £526.23
  • We divide this by 12 to get £43.86

Average energy bill by house size

Of course, not every household has the same energy needs. The larger the property (and the more people there are living in it) the higher you can expect average energy bills to be. This is why, when you sign up to a new energy tariff and don’t know your current usage, a supplier will estimate your usage based on the size of your property.
While property size isn’t an hard and fast rule, it can give you a good idea of what you should be spending on your energy.
So let’s break it down…

1 bedroom house / flat

A 1 bedroom flat or house (they exist) is likely to have only one or two people living in it and take up relatively little space. As such, it’s likely to be cheaper to heat. Suppliers estimate that a property of this size will use 8,000 kWh of gas and 1,800 kWh of electricity per year. Using the formula mentioned above, we can extrapolate this to an average bill of £450 per year, or £37.50 per month for gas and £368.16 per year or £30.68 per month for electricity. A combined energy bill of £68.18 per month.

2 bedroom house / flat

Statistically speaking, a 2 bedroom property uses the median average gas and electricity. That’s 12,000 kWh of gas and 2,900 kWh of electricity. So, that’s £602 per year or £50.17 per month for gas and £526.23 per year / £43.86 per month for electricity. That’s a combined energy bill of £94.03 per month.

3-4 bedroom house

Finally, a 3-4 bedroom family home is likely to be a property with high energy use. Suppliers estimate that a property of this size is likely to use around 17,000 kWh of gas and 4,300 kWh of electricity per year. This gives us an average energy spend of £792 per year or £66 per month for gas and £727.41 or £60.62 per year for electricity. Making for an average monthly energy bill of £126.62 for properties of this size.

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What affects the average gas and electricity bill?

There are many things that can affect the cost of your energy. The primary driver is the cost of wholesale energy. This fluctuates throughout the year, as well as year-on-year. Which is why variable-rate energy tariffs can rise and fall in price, and why many choose to lock their prices in for 12-24 months with a fixed-rate plan. Then of course, there’s your choice in supplier. Some suppliers (especially the “Big 6”) tend to charge more for their energy than their smaller counterparts. Needless to say your energy consumption also plays a large part, which is why it’s important to take small and sustainable steps to reduce your consumption. Where you live also plays a part in determining your energy costs. Everything from the number of customers a supplier has in your area to the charges imposed by the networks where you are, and how much energy is used by consumers in the area can impact the “postcode lottery” of energy prices.

What makes up my energy bills?

Your energy bill is made up of a broad range of different costs that are borne by your supplier. The energy watchdog Ofgem has a useful breakdown of these. From the largest to the smallest, these include:

  • The cost of wholesale energy
  • Network costs (getting the energy to you)
  • Operating costs (the cost of running the company)
  • Environmental and social obligation costs (delivering energy more ethically and sustainably)
  • VAT

What is the average kWh price?

Again, it’s important to note that energy prices are constantly in flux. Especially since wholesale energy costs have risen to pre-COVID levels. There’s also huge variations in unit costs between suppliers. However, we can arrive at a rough median average of 3.80p for gas and 14.37p for electricity.

What is the average standing charge?

Again, standing charges can vary enormously between suppliers. Especially since these are where they make most (or all) of their margin. However, a conservative estimate places average gas standing charges at 40p per day, and electricity standing charges at 30p per day.

How do gas and electric bills change in winter?

Gas and electricity usage tend to rise by around 36% in winter when compared to summer, according to data from the Department of Energy and Climate Change. This makes sense, as not only do we spend more time indoors during the colder months, we also rely on energy more to heat and light our homes and facilitate our comfort and entertainment.

What is the Energy Price Cap?

The Energy Price Cap was put in place by Ofgem in 2019. It is intended to prevent energy costs from rising too high and to prevent energy companies from profiteering. The Energy Price Cap is reviewed every 6 months to ensure that it is fair for consumers while also enabling energy companies to bear their operational costs.
At the time of writing, the Energy Price Cap stands at £1,138 per year for both gas and electricity. A rise of 9% from the previous cap of £1,042. It will be reviewed again in October 2021.

Average energy bill evolution

How have energy bills changed over recent years. Well, at the risk of over-simplification, they’ve gone up! Between 2004 and 2014 average energy costs have more than doubled from £565 to £1,344. The Energy Price Cap was introduced to help flatten this curve.

Why do energy costs change?

There are lots of reasons why energy costs change. Inflation and rising wholesale costs (which in turn are fuelled by the price of oil) are key drivers of energy price rises. The more it costs energy providers to buy or generate energy and run their companies, the more they have to raise their prices.

Expected average energy evolution

Where will average energy prices go from here? While it’s tempting to assume that we’re powerless to prevent them from rising, there are lots of good reasons to suspect that energy costs could actually lower in the coming years. For instance:

  • Energy consumers have more choice than ever, and this competition could prevent energy companies from profiteering.
  • The Energy Price Cap can be used by Ofgem to prevent energy companies from inflating their profit margins.
  • Renewable energy is cheaper than ever to produce, and our renewable infrastructure is steadily growing.
  • As renewable energy grows cheaper and more abundant in our energy fuel mix, we can expect this to impact on energy prices.

How to reduce your energy costs

There are lots of ways in which you can reduce your energy costs, without making huge compromises to your lifestyle. Here we’ll look at some ways to cut down on your gas and electricity costs respectively.

Ways to reduce your gas bill

Effective ways to reduce your gas bill include:

  • Turn down your thermostat (a reduction of just 1 degree could knock £80 off your annual energy bill)
  • Draught-proof gaps around your doors and windows
  • Take more showers and fewer baths
  • Get your boiler serviced regularly to ensure it’s at peak efficiency
  • Use a timer to ensure that heat energy is not wasted while you’re out at work or asleep
  • Keep your oven window clean. Every time you open it to check on your food, you’re letting heat out

Ways to reduce your electricity bill

Effective ways to reduce your electricity bill include:

  • Switch out incandescent bulbs (which are only 10% efficient) with low-energy CFL or LED alternatives
  • Stop leaving devices on standby. These “electricity vampires” can use up to 80% as much energy on standby as they do when active
  • Do your washing at a lower temperature. 30 degrees is perfectly adequate for general wear
  • When filling the kettle, only use the amount of water you need
  • If you’re on an economy 7 meter and tariff, try to charge your phone and other devices late at night during off-peak hours

Install a smart meter

A smart meter can reduce your energy bills by preventing inaccurate bills caused by estimates. What’s more, it will allow you to better track your usage and allow you to see the impact of energy-saving measures around the home in real-time. So you can see what’s working best for you.

Switch energy suppliers regularly

The Switch-Plan team can help you to enhance the cost savings you make by switching you to the best energy supplier and tariff to your needs. It’s estimated that the average household can save around £300-£400 every year just by switching energy suppliers. Even Ofgem recommends switching every 12-18 months to keep your costs down and keep the market competitive.
Call us today on 0330 054 0017 to see how much we could save you.
We’re available from 9am to 7pm.

Interested in learning more about comparing energy prices, check out our related articles to learn more!

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FAQ

Why is it important to know the average energy bill?

Knowing the average energy bill can help you to gauge our energy spending in relation to other households of a similar size, to see whether you’re overspending. It can also provide a useful indication of how much you could save with the right energy plan.

How much is the average cost of gas and electricity?

The average UK gas bill is an estimated £602 per year or £50.17 per month. The average electricity bill in the UK is around £526.23 per year and £43.86 per month.

What affects the average gas and electricity bill?

There are a lot of factors that could affect the average gas and electricity bill. These include:

  • Wholesale energy costs
  • Your location
  • Your energy usage
  • Your energy supplier and tariff

When do energy bills go up?

Wholesale energy costs tend to rise around winter as demand increases. If you’re on a variable rate tariff you may find that your energy prices rise around this time. Your supplier must give you at least 30 days’ notice before changing your prices. Switching to a fixed-rate plan could help you lock your rates in for longer.

Updated on 23 Jul, 2021

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