It’s worth knowing what the average energy bill looks like for two reasons:
So you can see how your bills and usage compare to the average
So you have a better understanding of the way “average” is used in connection with the energy price cap, which is usually reported as the annual energy cost for “average use” households.
The average bill will change each year depending on market factors, the level of the energy price cap, potential government intervention (as seen with the Energy Price Guarantee) and so on.
The average electricity bill in the UK as of 1 October 2022 is £987.16 per year (without factoring in the annual electricity standing charge).
Electricity bills have been rising steadily since the autumn of 2021 as a result of wholesale gas prices rising. Because gas is heavily used in the production of electricity, the cost of buying the gas means it costs more to produce the electricity, and those costs are then passed on to customers.
The average gas bill in the UK as of 1 October 2022 is £1,239.60 per year (without factoring in the annual gas standing charge).
Gas prices in the UK have been affected by various market factors - such as the Russia-Ukraine war - that have also had a significant impact on the energy prices of other European countries.
Ofgem usually publishes annual estimates of average energy usage by house size, which can then be extrapolated to find the average energy bills by house size. The regulator hasn’t published an estimate since 2020, citing the Covid-19 pandemic as a probable skewer of household energy usage as office workers were forced to stay at home. The next update is due in 2023, but until then, the 2020 estimates will be used.
|Number of bedrooms||Gas usage (kWh)||Electricity usage (kWh)||Estimated average annual dual fuel energy bill||Estimated average monthly dual fuel energy bill|
Estimated bill calculated by multiplying the kWh usage by the current average unit rates and adding current average standing charges:
10.33p per kWh for gas
28.49p per day for gas standing charge (£103.98 per year)
34.04p per kWh for electricity
46.36p per day for electricity standing charge (£169.21 per year)
You can see here how the annual usage for a “medium” household comes to almost exactly £2,500 - the figure used as an illustration by Ofgem, the government and the media when reporting on the energy price cap level.
When we talk about average gas and electricity bills, we’re usually talking about the price of standard variable tariffs - fixed deals are generally unavailable given the current energy market volatility.
This means that the average gas and electricity bill is affected almost entirely by the level of the energy price cap, which is set by Ofgem according to wholesale market prices. It limits the price that suppliers can charge per unit rate of gas and electricity but, as wholesale prices have risen, so has the cap level.
The government has frozen the price cap at a level of £2,500 for an average use household paying by Direct Debit until April 2023 (with the caveat that if you use more than £2,500 worth of energy, you’ll pay more - if you use less, you’ll pay less). However, the price cap may rise after April, which would mean that the average gas and electricity bill would rise with it.
There are two levels that affect average gas and electricity bills in the UK, then: wholesale market prices, and subsequently the reaction of Ofgem through the price cap level. But the average bill is only average if that’s the amount of energy you use - if you use more or less, your bill will be higher or lower than the average.
With energy prices unlikely to significantly lower in the short term (and probably even in the long term), one of the only ways that energy customers can reduce their home energy costs is by lowering their general energy usage wherever possible.
There are various ways you can reduce your home energy costs, including investing in energy-efficient appliances and making sure your home is well-insulated. One of the key ways you can manage your energy use more effectively is to use Utrack, which is Uswitch’s free mobile app. It connects to your smart meter, tracks energy use throughout your home and uses that information to provide you with personalised energy advice and opportunities to reduce the amount of energy you use.
There are also 104 energy-saving tips that Uswitch has compiled for every area of the home and every budget that may illuminate some opportunities as far as your home’s energy efficiency is concerned.
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