Understanding your energy bills

Energy bills

We've teamed up with green energy supplier , Octopus Energy to simplify the complex world of energy bills.

Our new research shows that 18-to-24-year-olds struggle the most to understand what they are paying for when it comes to energy – and why they’re paying it. Over 9 in 10 people in this age group didn’t recognise key terms that feature in an energy bill, words like tariff and kilowatt-hour, compared to the little over 2 in 10 65+ year-olds who couldn’t identify the definitions for the same words.

To help change this, Octopus worked with us to create easy and accessible definitions.

The energy company has also created an interactive bill explainer and a series of tips to lower your energy bills below.


Watch the video


Tips for lower energy bills

Switch off devices on stand-by mode

If you have lots of gadgets around your home such as wireless speakers, computer monitors, digital TV boxes, switch them off at the plug if you're not using them.

Choose energy efficient appliances

When it's time to purchase a new product, chose those with an “A” rating.

Know which appliances are the most expensive to run

Tumble driers, kettles and toasters are the most expensive, so you should only use them for the amount you need.

Don't leave the water running

A dripping tap can waste more than 5,500 litres of water a year. By leaving the tap running while brushing your teeth you could be spending between £40 and £60 a year.

Use energy efficient lightbulbs

These typically use 25-80% less energy than regular lightbulbs and can last 3-25 times longer!

Wash clothes at a lower temperature

Doing your laundry at 30 degrees celsius rather than 40 can be a third cheaper and could save you up to £52 a year for a family household.

Control your thermostat

Turning down your heating by just 1 degree, could save you up to £75 a year.

Glossary of terms

Dual fuel

This means you get both your electricity and gas from the same company. Single fuel means you get either gas or electricity from just one supplier.

Tariff

Your tariff is the package you have signed up to with your energy company. It is how much an energy company charges you for gas and or/electricity. Energy suppliers offer different packages which will cost different amounts.

The two main types of tariff are called fixed rate and variable.

A fixed rate tariff charges you a set rate for energy. On a variable tarriff, the costs per unit of energy can vary. So if your energy supplier has to play more or less money for energy can vary. So if your energy supplier has to pay more or less money for energy rates as well.

VAT

VAT ( Value Added Tax) is a type of sales tax which is added to your energy bill and paid to the government. It is a tax that is added onto the price of certain goods and services such as energy bills.

kWh

A kWh (kilowatt hour) is how energy is measured. It is the amount of energy you would use if you kept a 1,000 watt

appliance (such as a small hairdryer) on for an hour. kWH is the standard measurement in all energy bills, whether they’re for gas, electricity or renewable energy like solar power.

Unit rate

This is how much you pay for every kWh of energy you use. A kWh (kilowatt hour) is how energy is measured. It is the amount

of energy you would use if you kept a 1,000 watt appliance (such as a small hairdryer) on for an hour.

Standing charge

The amount you pay a company to provide you with energy. A standing charge is a fixed daily amount you need to pay no matter how much energy you use. It pays for things like maintenance work and getting gas and electricity to your home.

The amount of energy you use is an extra cost.