Energy bills aren’t always easy to understand. With unit rates, standing charges and estimated readings to get your head around, it’s easy to see why. The good news is that a few simple explanations can make your bill much easier to get to grips with.
What are you actually paying for?
Your energy bill has a few key parts. Here’s what they mean.
Unit rate: This is what you pay for each unit of energy you use, measured in kilowatt-hours (kWh). The more energy you use, the more you pay. (Gas meters measure volume rather than kWh, so your supplier converts the reading for your bill.)
Standing charge: A fixed daily fee for having gas or electricity supplied to your home. You pay it even when you use very little energy, so switching everything off won’t bring your bill down to zero.
VAT: Qualifying domestic electricity supplies in Great Britain have a temporary 0% VAT rate until 31 March 2027. Domestic gas generally remains subject to 5% VAT.
Fixed or variable: which tariff are you on?
Fixed tariffs keep your unit rates and standing charges the same for an agreed period, although your total bill still depends on how much energy you use.
Variable tariffs allow your rates to change. Standard variable tariffs are generally subject to the energy price cap, which Ofgem reviews every three months.
Neither is automatically cheaper. If you’re comparing deals, look at unit rates, standing charges, exit fees and contract length rather than the headline price alone.
Why has my energy bill gone up?
If your latest bill is higher than expected, a few things could explain it:
- You’ve used more energy. Colder weather, working from home or using appliances more often can all add up.
- Your tariff has changed. Your rates may have increased, particularly if a fixed deal has ended.
- Your readings are estimated. If your supplier has overestimated your usage, you could be paying more than you owe.
- You’re catching up. An actual meter reading might reveal more energy use than previous estimates showed.
Compare your latest bill with an earlier one. Checking your usage alongside your rates should help you work out what’s changed.
Four simple ways to keep costs in check
Check your tariff. Compare your current rates with other deals available to you, including any exit fees.
Keep your readings up to date. Regular readings can help prevent unexpected bills caused by inaccurate estimates.
Look at your usage. Your supplier’s app or online account may help you spot when you’re using the most energy.
Make small changes. Turning off unused lights, washing clothes at lower temperatures where suitable and avoiding heating empty rooms can all help reduce consumption.
Looking for energy deals?
If you’re looking to save on your energy bills, Health Service Discounts members can explore these energy deals:
- Compare energy tariffs: Compare energy deals with Energy Switch, powered by MoneySuperMarket, to find a tariff that suits your household and energy usage. In June 2026, 10% of customers who switched using MoneySuperMarket saved £382.*
- Get up to an £85 Amazon gift card: Explore ScottishPower’s energy deal. Get £85 for dual fuel (gas and electricity) or £42.50 for a single fuel tariff. Available to new and existing customers.
- Get £30 in Amazon vouchers: Explore So Energy’s electricity-only fixed tariff deal.
- Get £60 in Amazon vouchers: Explore So Energy’s gas and electricity fixed tariff deal.
- Get £50 credit when you switch: Explore the Octopus Energy NHS deal. Octopus Energy is the UK’s most awarded energy supplier.
Offers have different terms and eligibility requirements, so check the details before signing up or switching. A voucher or credit offer doesn’t necessarily mean a tariff is the cheapest option for your household, so compare the overall costs before deciding.
Sources