Different properties use different amounts of energy, so bills can vary between households. However, looking at average energy usage figures and costs can help you determine whether you’re using energy efficiently and whether you are paying too much for your gas and electricity.
With increasing home energy costs in the UK, it is hard to know how much you should be paying with bills quickly getting out of control.
In this guide, we will look at how UK energy prices have increased and make some suggestions on what you can do to save money in your household.
If you would like to compare the current energy prices available on the market, try our free energy tariff comparison tool.
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How Much Is The Average UK Home Energy Bill?
The price you pay for your home energy will vary depending on your supplier, usage, size of property, and location.
However, those on variable rate energy tariffs are protected by the Energy Price Cap. This sets a maximum amount suppliers can charge customers on variable tariff deals.
Currently, the price cap is set at £1,923 for the average household.
Can The Price Cap Help Reduce My Energy Bills?
In terms of protection, Ofgem has managed a price cap since 2018 to ensure that consumers are paying fair prices for their energy. That cap has, for the most part, moved both up and down over the years.
During the energy crisis, we saw the biggest increase in the level of the price cap as it rose above £4,000 for the average household.
However, prices have stabilised slightly to bring the price back below the £2,000 mark.
Here is a full history of the energy price cap since its introduction:
Price Cap Period
Price Cap Level
October 2020 - March 2021
April 2021 - September 2021
October 2021 - March 2022
April 2022 - September 2022
October 2022 - December 2022
January 2023 - March 2023
April 2023 - June 2023
July 2023 - September 2023
October 2023 - December 2023
January 2024 -March 2024
Ofgem now reviews the price cap every quarter.
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Average UK Energy Bills By House Size
Of course, energy prices do depend on how much your household is using.
Energy bills tend to be much more expensive if you have a larger home. This will be a result of factors such as heating costs; with larger homes having more space to heat. The size of your home is also likely to impact expenses such as your water bill, as the more bathrooms you have, the higher your usage can be.
Here’s a breakdown of the average energy costs for homes depending on their size:
Average KwH Usage
Average Annual Cost*
Average Monthly Bill
1-2 bedroom house
Gas: 8,000 kWh/ Elec: 2,000 kWh
Gas: 12,500 kWh/ Elec: 3,000 kWh
Gas: 18,000 kWh/ Elec: 4,500 kWh
*Calculations based on the following kWh figures:
- Electricity unit rate 28.34p per kWh & 45.34p daily standing charge
- Gas unit rate 7.37p per kWh & 27.22p daily standing charge.
How Energy Consumption Affects Your Energy Bills
Another key factor that impacts your energy bills is your energy consumption. This is what will be applied to your unit rate to calculate your total bill. You should aim to keep your energy usage as low as possible and find an energy deal with affordable rates.
Several factors influence the amount of energy used in your home. Here are some examples:
The number of residents – The more people that live in your home, the more energy is used. Most energy usage tends to take place on weekends, as this is typically when most people are at home.
Time of year – Wintertime is typically when average energy bills are at their highest. Not only can energy prices increase (unless you are on a fixed rate tariff), but your usage is likely to go up as you generally spend more time at home with the heating on. In contrast, summertime provides a great opportunity for you to lower your energy usage and your bills. Here is some more information on the best time of year to switch energy suppliers.
Appliance Use – A vast amount of your energy consumption comes from the appliances you use. To save energy, you should aim to turn appliances off when not in use.
You should pay attention to appliance power ratings and energy labels before purchasing. This way, you'll get an idea of how efficient they are. As a rule of thumb, appliances that produce heat and have moving parts tend to use more energy than those that produce sound or light.
How Your Tariff Type Affects Your Home Energy Bills
The energy tariff you select for your home will have a significant impact on your bills. There are two main types of energy tariffs: fixed-rate and variable rate.
Fixed-rate tariffs have unit rates that stay the same for the duration of your energy contract. Your bills will be predictable and won’t change unless there's a change in your energy use. This used to be the most desired energy tariff before many energy suppliers started to pull tariffs off the market during the UK energy crises.
There are still some ‘good’ fixed-rate tariffs available. However, it is no longer the case of finding a cheaper energy deal than the one you are currently on. The attitude has switched to managing the costs against projected energy price cap rises.
Standard rate energy tariffs have no fixed unit rates. Your energy bills could be different each month. The majority of UK households are now on this type of tariff due to the lack of availability of fixed-rate tariffs.
Will An Economy 7 Tariff Save Me Money?
Economy 7 tariffs have unique benefits for particular types of households. An economy 7 tariff can be variable or fixed but the main difference is that they have separate unit costs for the night and day rates. They are designed for households using the majority of their energy at night or if they have storage heaters.
Households with high energy usage during the day may find their bills would increase when switching to an Economy 7 tariff.
However, if you use most of your energy at night or run storage heaters, you may be able to reduce your bills with an Economy 7 energy tariff.
Economy 7 On Fixed Or Variable Rates
A variable rate is subject to change at any time. So this means your night and day rate will fluctuate. A fixed tariff on an economy 7 deal means that the day rate and night will stay fixed at the agreed price per kWh when you agree to the deal.
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How To Reduce Home Energy Costs?
The main way to reduce costs is to reduce consumption. This does not mean you should sit in the dark at night, but to become smarter with your energy. We understand that many more people are working from home since the 2020 COVID-19 pandemic. Placing more importance on learning to become more energy efficient.
Here are some ways you can reduce your energy bills:
Control The Heating
We now have more ways than ever to control the temperature of our homes. Smart thermostats can offer the greatest control, however, they can also be an expensive investment for most homes.
However, a digital thermostat can be picked up for as little as £30, allowing you to set a specific temperature for your heating. Some suppliers may even offer a free digital thermostat for switching with them.
According to Energy Saving Trust, reducing the room temperature by just 1 degree can cut heating bills by up to £75.
LED light bulbs have a huge impact on bringing down electricity bills. With lower running costs, this investment could bring savings of around £180.
Switch Energy Supplier
If you haven’t switched in a while, it’s likely you will save a lot of money by switching energy suppliers. Switching energy suppliers is still a great way to manage your energy costs and although not practical, you can switch suppliers as often as every 28 days to ensure you’re always getting a great deal.
As energy bills increase, it's more important than ever to find the right gas and electricity deal for your home.
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Invest In A New Boiler
Older boilers are less energy efficient than new models. This is a much larger consideration than just making habitual changes to save energy but it can bring in the largest savings if able to afford the upfront cost. Investing in a new boiler will make a huge difference to energy costs in your home. A new boiler saves you up to £315 per year on average.
Improve Home Insulation
Upgrading loft insulation and cavity walls will provide large energy savings. You may be eligible for the Government's Green Home Grant to cover some costs. Improved insulation saves you up to £315 per year on average.
When Is The Best Time To Switch to Home Energy?
It is good practice to compare energy deals every 6 months to ensure you are getting the best deal. Some energy suppliers may charge exit fees if you switch earlier than your contract terms. Most energy contracts are fixed for 12 months but in some cases, the savings are larger than the exit fees.
To avoid forgetting, add a reminder to your calendar 49 days before your contract end date. Suppliers cannot charge you any exit fees if you start the switching process during this window.
Can Businesses Save on their Energy Bills?
If you are a business energy customer, then this advice can also lower your commercial electricity and commercial gas bills. Comparing business energy suppliers and switching to a cheaper rate also works for commercial sector too.
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With Love Energy Savings, finding a great energy deal is simple. To find out how much you could save, just complete our quick home energy comparison calculator.
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