Understanding utility bills

If you’re moving into a new rental or (if you’re very lucky) buying your own home, you’ll have to pay utility bills…

What are utility bills?

They’re the essential services needed to run a home – gas, electricity and water. Utility bills show how much energy you’ve used and what you need to pay.

If you’re renting, utility costs are rarely included with your rent and you have to pay them separately. You’ll need to call each energy provider and put the bills in your name.

Top tip: Check the readings on your gas and/or electricity meter the day you move in – otherwise you could be charged for power used by previous tenants.

How are gas and electricity bills worked out?

Suppliers use either a meter reading or your average energy usage over a period of time to work out your bill. It should say on the bill if it’s estimated. Important! You don’t have to pay an estimated bill. You can contact your supplier with your latest meter reading and ask for another bill.

Energy bills can look daunting, so for more help take a look at Citizens Advice’s great tool on understanding the detail of different suppliers’ bills.

Top tip: Always check your bill. If it’s suddenly gone up, and you haven’t changed your usage, it’s worth looking into.

Learn how to take a gas meter reading here

Electricity bills…

  • Measured the same as gas.

TIP: Energy suppliers are companies that supply both your gas and electricity

How are water bills calculated?

There are two parts to your bill: the fresh water that comes out of the tap (domestic water) and sewage charges for the stuff that goes back into the system as waste (sewage water).

You either pay your water bill on a fixed annual rate (metered) or on the amount of water you use each year (unmetered), measured with a water meter. If you don’t have a water meter you can request one free – even if you’re renting, as long as your tenancy agreement is for 6+ months.

Top tip: it’s not always cheaper to switch from a fixed fee to a meter – check with your supplier first.

  1. Unmetered water bills: This means you pay for domestic water and sewage service, regardless of how much you use based on the rateable value of your home. For more info click here.
  2. Metered water bills: The majority of water meters are outside, either in your garden or in public nearby. Typically the supplier reads the water meter twice a year and your bill is calculated based on those readings. When reading the meter yourself, note the black numbers and ignore the red numbers.

For more information about water bills head to the Southern Water website

Reading meters

By law, energy suppliers only have to read meters every two years, but many of them do it about every six months. To keep on top of your bills, it’s handy to know how to read (and find!) your meter yourself. Check out these other guides to get this nailed:

A final thought … if your utility bills are really high, it’s worth looking at switching suppliers. Switching is becoming easier and you could save hundreds of pounds. MoneySavingExpert has a great guide on how to do this.