What is the key to understanding my gas bill?

So, when that gas bill lands on your doorstep you will be confronted by a document with lots of figures and abbreviations. All of which might leave you thinking: ‘How do I go about understanding my gas bill?’

Well, firstly, don’t worry. You’re not alone. A YouGov poll found that around 60% of people have trouble understanding their gas bill. People find it hard to get their heads around the unit price and voted gas suppliers as the worst offenders for sending out confusing bills, beating water companies, mortgage companies and phone providers.

If you have not paid gas bills before, or just not really paid them much attention other than to pay the total, it can all be quite confusing. But when you break it down, it’s actually quite simple. This guide to ‘understanding my gas bill’ will tell you everything you need to know.

Keep reading below and you’ll soon go from asking the best way of understanding my gas bill to being a gas expert.

How do you read a gas bill ?

Although gas bills from different providers all look slightly different in terms of the layout, colour scheme and presentation, all the same information appears on the bills. So, whether you get your bills from British Gas, EDF or a smaller supplier, you need to look out for the same bits of information. This is the key to understanding your gas bill.

The main bits of information to look out for are:

1. Charges, balance and credit/debit
2. Usage
3. Plan details and annual usage
4. Meter details

Let’s take a closer look at these parts individually.

Charges, balance and credit/debit

Your balance will tell you if you're in credit or debit to your supplier. Knowing this information will help you to find out if your direct debit is at the right level to cover your gas usage.

If you are in credit in the winter, then maybe you should be paying less in direct debit. If you are in debit to your supplier in the summer, then you will start to build up even more debt in the winter months when usage tends to go up. Your supplier may choose to automatically increase your direct debit if this is the case. The best way to make sure your balance and your direct debit are in harmony is to supply regular meter readings.

Plan details and usage

There will usually be a section on your bill which details what gas plan or tariff you are on with the supplier. This will name the tariff, show the end, and include other information such as the cost of exit fees. If you are looking to switch your tariff, this information is very important. Once you have established which tariff you are on, you can then start looking around for a more suitable option.

If you’re on what’s known as the standard variable rate, or something similar, then the chances are that you are on the default tariff plan, which is usually the most expensive. This usually happens if an existing tariff has expired and you haven’t joined a new one. If this is the case, switching could potentially save you a large amount.

If you’re on a different kind of tariff, you should also take note of the end date as this is the point you will be automatically switched to the default standard variable rate.

Usage

Usually, along with your tariff information, you will also find your annual usage. This will generally be an estimated figure based on your current usage to date. This information will be displayed in kilowatt hours, or kWh.

A kWh is a way of measuring how much energy you are using. People incorrectly assume this relates to the number of kilowatts you use in one hour. But that’s not exactly how it works. In fact, a kWh keeps track of the amount of energy you would use if you kept a 1,000 watt appliance constantly running for one hour.

That might sound confusing but it’s simple if you break it down. Imagine you have a 100 watt lightbulb switched on. It would take 10 hours of being turned on to use up 1 kWh of energy. Alternatively, a 2,000 watt washing machine would use 1 kWh in just 30 minutes.

Your annual figure is the amount of kWh you will use in a year,mprn based on current numbers.

Some bills also now contain QR codes. These are the black and white boxes that look a little like a barcode. If you have a smartphone, you can scan this code using some apps which help you to figure out if switching would save you money.

Meter details

Every home that uses natural gas has a meter which counts the amount of units you are using. This information is then used to work out your bill. Each meter has its own identification number to help organise the accounts and ensure you are billed for the correct amount of gas.

Your gas supply meter number is known as the MPRN. For electricity it is the MPAN. If you receive a dual fuel bill these two numbers will be next to each other on the bill. The MPAN starts with an S, whereas the MPRN is a simple string of 10 digits.

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What’s in your gas bill?

As well as the information above, you might also find some other terminology in your gas bill that may be confusing. Below we’ll take a quick look at some of the commonly used words and phrases on a gas bill.

1. Fixed rate – this is a tariff that is fixed for a certain period of time, meaning you will pay the same amount per unit of gas all through the term of the contract
2. Variable rate – this is a tariff where the price per kWh varies according to the wholesale price of gas

Paperless billing

Of course, these days it makes sense for us all to try and cut back on the amount of unnecessary paper and energy we use. Which is why paperless billing has become such a thing in recent years.

If you choose to go the paperless bill route you will no longer receive hard copy bills in the post. Instead your bills will be sent electronically to your email account or will be stored in a customer area where you can log in to see them. You will receive a message when your latest bill is ready to view or pay.

However, other than the change or delivery method, the look of the bill and the information it contains will remain exactly the same.

What would cause a high gas bill?

As most people get billed for gas on a monthly basis the amount you owe each time can go up and down throughout the year. There are many reasons for this, some of which are natural, and you don’t really need to worry too much about. However, if you notice that a bill is substantially higher then there could be an issue that needs investigating.

First, let’s look at some of the common reasons that gas bills fluctuate throughout the year.

1. Seasonal changes – It is completely normal to use more gas in the winter months than you do in the summer. That’s because you will be using more hot water and more energy for central heating in your home when it’s cold outside than in the warmer times of year
2. Wholesale cost of fuel – If you are on a variable rate then the amount you pay per unit depends on the wholesale price of gas. If this goes up then so does your bill. You can always switch tariffs to a fixed rate deal to avoid this
3. Changes to lifestyle – If you have started taking lots of deep baths or maybe bought a load of new heating appliances then you may notice a change in your bills. The same will apply if more people move into your home

Now let’s look at some of the other reasons you might get a higher than expected bill and what you can do to avoid these:

1. Poor insulation – If your home is poorly insulated or you have old and outdated appliances then you may be using far more gas to keep warm than you might otherwise need. Consider getting better insulation, such as double glazing and update your boiler and thermostat to more modern options
2. Inaccurate readings – Sometimes high bills are because energy companies simply estimate usage. Make sure you provide regular and accurate meter readings to help avoid this
3. Billing issues – these are generally very rare but they do happen. If your bill is way out of the ordinary, then it might be an issue with the billing

What is the average gas bill?

The average gas bill in the UK depends on the size of property. That’s because larger homes use more energy to heat and tend to have more people living in them. For 2019, the figures were as follows:

What does ‘in debit’ mean on a gas bill?

If your bill says that you are in credit, it means you have been paying more for your gas than you have been using. This credit mount will be taken off your next bill meaning you owe less in future. If you are in debit, it is the reverse. It means you have underpaid for your usage in recent months and will need to make up this shortfall in one of your next bills.

If you have any questions about your credit/debit or to change the way you pay, then get in touch with your supplier and have a copy of a recent bill to hand.

Is natural gas cheaper than oil to heat?

In recent decades, using natural gas has been the most cost-effective way to heat your home, Much cheaper than electricity which comes in at more than 12p per kW, compared to gas which is about 3.5p.

Gas is also cheaper than heating oil, although the difference is less pronounced. Oil prices are currently very low due to a global drop in prices. However, oil prices tend to be very volatile and can change rapidly.

Would you like to know more about managing your utility bills? Great! Check out these related articles

1. How to work out gas bill
2. Standing charges
3. Paperless billing

FAQ

What’s in your gas bill?

Your gas bill will contain personal details about your account and tariff options. There will be a balance and credit or debit amounts. You will find your meter number and details about the amount you have used and cost per kWh.

What would cause a high gas bill?

There are many different causes, some are more of a concern than others. It could be as simple as a change of season, with more gas being used in the winter or having someone else move into your home. However it could also be due to poor insulation or even a billing error. It’s always worth speaking to your supplier if it is more than usual.

What does ‘in debit’ mean on a gas bill?

If you are in debit, it means you have underpaid for your usage and will need to make up this shortfall in one of your next bills. If you have any questions about your bill or to change the way you pay, get in touch with your supplier.

Can I go paperless?

Yes, almost all providers offer a paperless option which means you no longer receive bills in the post but via email or a customer log in.