How to Work Out Your Energy Bill

Your gas and electricity bill has two parts. You pay a unit rate for each kilowatt hour (kWh) of energy you use, plus a daily standing charge, which you pay every day whether or not you use any energy. If you know these and roughly how much energy you use, you can estimate your own bill.

What the energy price cap is

Ofgem, the energy regulator, sets a price cap for households on standard variable (default) tariffs in England, Scotland and Wales. Ofgem updates it every three months. The cap limits the unit rates and standing charges suppliers can charge. It does not limit your total bill, so the more energy you use, the more you pay. If you're on a fixed tariff, the cap doesn't apply to you and your contract sets your rates.

Price cap rates from 1 October to 31 December 2026

These are Ofgem's average rates for Great Britain for customers paying by Direct Debit, as published by Ofgem on 26 August 2026. Rates differ by region and payment method, so check Ofgem's rates where you live or your own bill.

• Electricity: 26.32p per kWh, plus a standing charge of 54.83p per day

• Gas: 7.97p per kWh, plus a standing charge of 29.68p per day

The government has removed VAT from domestic electricity bills from 1 October 2026 to 31 March 2027, so the electricity rates above don't include VAT. The gas rates include VAT at 5%.

Worked example: a typical household

Ofgem uses "typical domestic consumption values" to describe a typical household's usage. From 1 July 2026, these are 2,500 kWh of electricity and 9,500 kWh of gas a year (Ofgem decision, 27 May 2026). At the rates above, a typical household paying by Direct Debit would pay:

Electricity

• Usage: 2,500 kWh × 26.32p = £658.00

• Standing charge: 365 days × 54.83p = £200.13

• Electricity total: £858.13

Gas

• Usage: 9,500 kWh × 7.97p = £757.15

• Standing charge: 365 days × 29.68p = £108.33

• Gas total: £865.48

Total: about £1,723 a year, or about £144 a month. This matches the £1,723 typical annual bill Ofgem published for this period. Ofgem's figure is calculated from unrounded rates, so totals worked out from the published rates may differ by a few pence.

This is an annualised figure: it shows what a year would cost if these rates applied for all 12 months. In practice, the rates can change every three months, and most households use more energy in winter than in summer.

How to estimate your own bill

• Find your usage. Your annual statement or recent bills show how many kWh of electricity and gas you've used. A 12-month total gives a better picture than a single month, because usage changes with the seasons. If you have a smart meter, your supplier's app may show this too.

• Find your rates. Your bill shows your unit rates and standing charges. If you're on a standard variable tariff, they'll be at or below the price cap for your region and payment method.

• Work out the usage cost. Multiply the kWh you use by the unit rate for electricity, and again for gas.

• Add the standing charges. Multiply each daily standing charge by the number of days (365 for a year).

• Add it all up. Add your electricity and gas totals together. Divide by 12 for a monthly figure.

Your actual bill will depend on your tariff, region, payment method, meter readings and how much energy you use, so treat any figure you work out as an estimate.

For more on electricity prices, see our article on the average cost of electricity in the UK.

Rates and typical usage figures are from Ofgem and apply from 1 October to 31 December 2026. Checked 1 October 2026.