What is the average gas bill and average electricity bill in the UK?
09 July 2020 | OVO Energy
In 2019 the average combined gas and electricity bill for UK households reached an eye-watering £1,289 a year. Broken down, the average electricity bill was £679 – an increase of 6% compared to 2018. As for gas, the average bill was estimated as £610 – a rise of 2.8%.
Averages can be quite confusing and non-specific – so to give you a better idea of how your own energy use compares, check out our handy chart (see above). It estimates the total bills for houses that use small, medium and large amounts of energy, using the latest statistics.
As you can see, for a medium (3-bedroom) home, the annual bill is estimated as £1,163. For a small (1-bedroom) home, it’s £795. And for a large (4 or more bedroom) home, it’s as high as £1,639.
To find out how much electricity an average UK home uses (kWh), which appliances we spend the most on, and how your home compares, check out our new guide.
How to use this guide
In this guide, we'll explain how and why bills have gone up over the last few years, and what you can do to keep yours as low as possible.
Average gas and electric bills are up
In 2018, British households spent around £30 billion on gas and electricity – and between 2017 and 2018, retail prices on electricity jumped by 6%.
UK households paid on average £41 more for their energy bill in 2018, compared to 2017 – an increase of 3%.
More specifically, electricity bills rose by 6% or £36, and gas bills rose by 1% or £5.
Those price rises might come as a surprise – especially given that in the last 10 years, there’s been a downward trend in domestic energy use.
Why is energy use down?
The slowdown in energy use over recent years reflects a few different issues. Rising prices is one key factor – and warmer winters, better insulation and smaller house sizes are also playing a role.
So why have our bills gone up so much?
As we’ve shown, the average energy bill has increased dramatically, even though the energy we’re using is actually falling. So what’s driving this?
There are a few key factors that explain the UK’s rising energy costs:
- First and foremost, wholesale energy costs – which make up around a third of your bill – are on the up. These have added hundreds of pounds to the average bill over the past few years.
- Networking costs make up around a quarter of your bill, and they’re also on the rise. These are the costs involved in building, maintaining and operating the gas pipes and electricity wires.
- Supplier operating costs – which cover the sales, metering and billing costs of running a retail energy business – are rising.
- Finally, taxes, environmental and social levies add still more to the overall cost of the energy you use.
Want to learn more about understanding your bills? Check out our guide that explains why your gas and electricity bills might be higher than you expected, and what to do about it.
So what can you do to lower your energy bill?
It’s helpful to know why your energy bills have gone up over the last few years. But it’s even more useful to know the steps you can take to lessen the impact! Here are a few simple things you can do to make sure you aren’t paying too much:
1. Control your heating
Heating and hot water are generally the biggest factors pushing up UK energy bills, accounting for more than half of money spent on fuel bills. For every degree Celsius cooler your home is, your heating bills will fall by about 10% – and your carbon emissions will fall too.
In fact, if all of us in the UK turned our thermostats down by just 1 degree, we’d prevent 8.8 million tonnes of carbon entering the atmosphere each year.
That doesn’t mean you should suffer a cold house! The smart solution is to set some zones warmer than others, and to avoid heating your home when you don’t need to. This way, you don’t waste heat (and energy) in rooms that don’t need the warmth, or aren’t being used.
2. Insulate, insulate, insulate
If you lived in a perfectly insulated home, you wouldn’t have a heating bill. Mad but true. That’s because your heating system simply tops up any heat that is lost.
Good insulation can cut your bills – and a smart, well-informed approach can help you to recoup your insulation costs.
For the average UK home, many insulation technologies will pay for themselves (and more) in just a few years. These include loft insulation, draught proofing, cavity wall insulation and hot water cylinders. These are the no-brainers, and taking these key steps will pay back in around ten years.
Options like external wall insulation, thermal walls and double glazing can take longer to pay back in terms of energy savings. In spite of that, they’re still highly recommended methods for preventing energy waste and helping to reduce your carbon emissions.
3. Monitor your electricity use
Monitoring your electricity use is a simple and effective way to get smart about energy. The cheap and easy solution is something like a smart meter, which is a very clever way to track your energy use and spend. Think of it as your home’s private detective, working tirelessly to discover when and where you’re spending on energy, and showing you how to make savings.
A kill-a-watt is another handy little option. This plugs in between the wall and your appliance, and quickly shows up any standby problems.
The more advanced option is to get a real-time meter. If you go this route, make sure it has a prominent display, and use it to help you turn off as much as you can when you go to bed or leave the house.
4. Embrace low-energy light bulbs
A decade back, low-energy light bulbs were inefficient, expensive and terrible. Now they’re more efficient, cheaper and literally brilliant! With the exception of 100W replacement LEDS, they’re excellent value. Swapping an incandescent used for a couple of hours a day to an LED pays off in just over a year.
The graph above charts the average gas and electricity prices in the UK in real terms, so we’ve controlled for inflation in it. What it shows is that between 2004 and 2014, the real price of a unit of gas shot up 115%, while electricity prices jumped 63%.
Before you head off to the shop, make sure you know what fitting you need (B15?), what shape you want (universal?), how many lumens you need (800 lm?) as well as how many kelvin (3000K?).
And if you’re feeling a little left-in-the-dark about some of these terms, check out our beginner’s guide to energy saving light bulbs. And for more tips on how to cut your electricity, check out our top 14 ways to save electricity at home and cut your bills.
5. Make sure your appliances are efficient
For instance, choosing a plasma instead of an LED screen will lock you into high energy use. Due to EU regulations, most new appliances are pretty efficient – but it’s always worth having a look at their annual energy use. The biggest energy drains tend to be tumble dryers and fridges (because they're always on).
Other energy-saving tips include:
- keeping your freezer defrosted
- using low temperatures in your weekly wash
- only boiling what you need when you’re making a cuppa.
6. Make your own energy
If you’re interested in generating your own forms of energy, solar energy can be a great idea, depending on your situation. Do you have a good roof that faces the sun? What feed-in tariff will you get? How long will you stay in the home? Can you make it look good?
If you’re considering solar, make sure you get at least three quotes, and check that your panels and inverter (that’s the device that converts the electricity generated by your solar panels into a usable alternating current) are high quality.
Batteries are an integral part of a good solar system. If you generate green electricity through solar panels or a wind turbine, a battery can power your home, and store what you don’t use for later. Even better, a battery can even feed energy back into the grid at times of peak national demand.
Do this and you’ll be able to polish your halo – because that helps to make sure there's enough electricity available when we all need it. When there’s not, dirty coal power plants get fired up to fill the gap. But if we can store renewable energy, or if we just use less energy, then this shouldn’t happen – and the whole country’s electricity could be 100% renewables! That’s the goal we’re working towards.
You could also consider vehicle-to-grid technology (V2G), which gives you ultimate control over your energy – and can even make you money! In a similar way to batteries, this tech enables energy stored in electric vehicles to be sold back into the national electricity network, to help supply energy at times of peak demand.
7. Pay by Direct Debit
Try to pay by Direct Debit if you can. Direct Debit is around £50 cheaper than standard credit or prepayment, for both gas and electricity. That’s a £100 saving, just for being organised!
8. Compare energy suppliers
No matter which energy supplier you’re with, it’s always worth checking the market regularly, to see if you could save money by switching.
If you’re on a standard variable tariff (SVT), like much of the country, you’re probably paying far too much for energy. In recent years, the gap between the average standard variable tariff and the cheapest on the market has grown to over £260 – creating what is effectively a two-tier market.
In 2019, as many as 49% of UK customers reported that they’ve never, or only once switched energy suppliers. If you haven’t checked your options lately, it could make sense to switch to a more competitive one – such as OVO’s Better Energy plan.
Check our range of plans and see how much you could save now.
*Source and notes for graphs and table
1. Energy Trends and Energy Prices published 26 March 2020 by the Department for Business, Energy and Industrial Strategy. Covering data for the fourth quarter of 2019. (Estimates are based on fixed consumption of 13,600 kWh of Gas and 3,600 kWh of Electricity).
Annual bill estimates calculated using the ‘standard user’ profile used by energy companies and price comparison sites.
2. Ofgem State of the energy market report 2019 https://www.ofgem.gov.uk/system/files/docs/2019/11/20191030_state_of_energy_market_revised.pdf
5. Turning the thermostat down by one degree you can save 320kg of carbon a year, or 0.32 tonnes (Source: Energy Saving Trust). We multiplied this by the number of households in the UK (ONS, 2018). 0.32 * 27,600,000 = 8,832,000 tonnes each year.
6. Sources: IEA - Assumptions: this analysis assumes a 60W incandescent is replaced with 10W LED that costs £6 and that the bulb is used for 2 hours each day. No additional bulb costs are assumed. Increasing bulb cost will increase payback time, increasing bulb use will reduce it.
Typical Eenrgy Bill by House Size
Data: Typical domestic consumption values (TDCV) from Ofgem (2013). Prices data based on national average standing charge and unit ratesin 2014 from 'Energy Consumption in the UK' (DECC 2014)
Average gas and electric bills: 2004-2014
Note: All figures based on 'typical usage' of 15,000 kWh of gas and 3,800 kWh of electricity in cash prices. Please note the latest typical domestic consumption values published by Ofgem suggest that a medium user consumes 3,200kWh for Electricity and 13,500kWh for gas. The historical data used here is more representative of the current mean.
Average gas and electricity prices (p/kWh)
Note: All figures are a national average and include both the unit rates and the standing charge in p/kWh (2010 prices) - Source DECC Quarterly Energy Prices, March 2015
Average household gas and electricity use (kWh/y)
Note: There is a downward trend in gas use whhen data is adjusted for heating degree days - Source: DECC Energy Consumption in the UK (ECUK)
Cost changes in dual fuel bills 2004-2013
Note: CCC calculations based on DECC quarterly Energy prices & Ofgem's supply market indicators - Source: CCC Energy bill supporting data
The rising price of loyalty to the Big Six
Source: Energylinx.co.uk, accessed 02/08/12 and every subsequent Thursday to the 12/02/2015. Data uses Ofgem standardconsumption (profile 1) 2 for dual fuel users, averaged across all regions.