How to read your energy bill

Many people in the UK admit struggling with their energy bills and finding them overly complicated and filled with jargon. Understanding your bill helps you compare different energy providers, so has created this short, simple guide.

Felicity King-Evans: So what do you do when your energy bill hits your doormat, do you ignore it? Do you read it? Do you understand it?

Well, lots of people say they find their energy bills difficult to follow, they don’t really understand the jargon that is inside them.

So, we’ve put together this short guide to reading your energy bills, so you are never left in the dark.

Energy bills can seem pretty complicated and many consumers admit they struggle to understand them.

To overcome that, Ofgem has demanded that energy firms make their bills clearer, as well as giving customers annual statements to help them understand precisely how much they’re paying for their energy.
These changes come into play from July next year – but in the meantime, taking a few minutes to really understand your bill will help.

Bills vary from provider to provider but the information inside them is broadly the same. Let’s take a look…

Most bills will have a simplified breakdown of your usage on the front page. So, for example this one from E.ON has were they last read the bill payers meters and the account balance. This billpayer’s paying by monthly direct debit and his payments aren’t quite covering his usage, so E.ON’s increasing his monthly payments.

You see if you are paying by direct debit, you might be overpaying or underpaying. Sometimes that is normal, you overpay in the summer so your bills don’t rocket in the winter – but if you’re at all worried about an outstanding balance, and your supplier hasn’t got in touch, give them a ring.

It’s really important to understand whether your bill is estimated or not.

Now Eon’s bill states quite clearly whether or not they have read the meters but some providers use a code so you will need to watch out for that.

If you can see an ‘A’ on your bill – that means it’s an actual reading, the supplier has come out to your house and read your meter. If it says ‘C’, then it’s a customer reading, so you have read your meter and then submitted that information to your provider.

If it says ‘E’, then that means it an estimated bill – so you should read your meter as quickly as possible and let your provider know otherwise you could find you have been paying to little and you suddenly get slapped with an unexpected bill.

Okay, turn the page and things start to look more complicated.

This is the detailed breakdown of the energy you’ve used.

Because this is a dual fuel bill, you can see gas and electricity… There are previous and current readings and the total amount of kilowatt-hours used – in this case 672.

Now, some of those are the more expensive primary units, while others have cost much less and are secondary. The threshold for these varies from provider to provider but primary units essentially cover the fixed rate costs energy firms have to pay to supply you electricity.

If you look at this billpayer’s gas, you can see they are paying an IGT charge. That stands for 'Independent Gas Transporter' and means their home isn’t supplied by the national grid.

Look at your meter point reference on your bill. If that begins with a 74 or a 75 then you’re supplied by an IGT.

Reading your energy bills may not be the most interesting way to spend your time but it is really useful.

It helps you monitor the energy you usage, keep in top of your bills, and gives you all the information you need if you want to switch your supplier and find a better deal.

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