Energy bills are a mystery to four out of ten people; here's how to read them right

Energy bills can be difficult to read; here are the main things you need to be paying attention to

Energy bill
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Energy bills have emerged as a surprisingly common source of confusion, with four out of ten people admitting they had trouble reading them in a recent poll by Energy Helpline. 

Gas and electricity bills cause more confusion than any other type of bill, which is worrying, given that millions of people overpay for their bills every year. With several pages of information to go through (much of which is often in a small print), it can be tempting to just not bother and to pay whatever amount is on the bill. But, if you suspect that your bills are higher than they should be, these are the most important areas of your bill you need to read carefully.  

  • Are you paying too much? Use our energy comparison tool to see if you could save on your energy bills

1. The amount due and price breakdown 

Typically, while the total amount payable will be easily visible on the first page of your bill, the price breakdown will be on the next page, depending on your provider. That's where you will also be able to see whether you bill is based on actual or estimated usage. Some providers will tell you, 'we read your meter', with a date, or 'estimate meter reading', also with a date. Others may simply put an 'A' or an 'E' next to a reading. 

Avoid estimated readings at all costs. If the estimate is too high, then you're overpaying; it it's too low, then sooner or later you'll get an unpleasant shock when your meter is finally read. Always know where your meters are and supply regular meter readings to your energy supplier.

If you have received an estimated bill, you can supply your provider with an actual meter reading, and they will then need to issue you an up-to-date bill (your payment due date will also then shift).

2. Standard or fixed tariff?

You bill will tell you, usually on the first page, the name of your tariff. If it's a standard or variable tariff, you would almost certainly save by switching to a fixed tariff, whether with your current or different supplier. Your bill will also usually give you a price comparison: look for 'could you be paying less' or similar section, which should give you advice on savings that could be made by switching to a fixed tariff.

3. Energy price per unit

This is one of the most important bits of information about your energy tariff, which many people ignore. Yet this is what actually determines how good your current energy deal is: at the end of the day, you pay your provider per kilowatt of energy consumed. So, pay less attention to any annual or monthly estimates the company gives you and work our your energy costs by multiplying your actual energy usage in kilowatts by the cost per unit. This information will be on your bill: look for 'actual energy used', and 'price per unit'. Also note the 'standing charge': this is a fixed price your provider will charge you per day, regardless of whether you've used any energy or not.  

4. Debits and credits

If you are paying by direct debit, you essentially have an account balance with your energy provider. While the amount you pay every month will stay the same, your energy use likely won't, so you account will be either in credit or in debit, depending on whether your direct debit payments are covering all your energy usage. If you are consistently over- or under-paying, your provider should get in touch with you to alter your monthly direct debit payment. If they haven't done so, contact them yourself.

5. Notice of fixed term contract expiry 

This is very important if you want to avoid being put on a (expensive) standard tariff after your fixed term deal expires. Your energy provider should send you a separate piece of communication, whether by letter or email, to give you notice of your fixed term coming to an end, typically 45 days or longer. This will give you time to renew to another fixed term tariff, or switch supplier. 

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