How to read your electricity bill
Guide · updated 2026-08-23
A UK energy bill is four numbers wearing a lot of formatting. Once you can find them, checking the bill takes about a minute.
The four numbers that matter
The arithmetic is: (unit rate × kWh) + (standing charge × days) = the bill, with VAT either already inside those rates or added at the end. Nothing else on the page changes the total.
- Unit rate — pence per kilowatt hour (p/kWh). What each unit of electricity or gas costs. On a half-hourly tariff there is one of these per settlement period rather than one per bill.
- Standing charge — pence per day, charged whether you use anything or not. It covers network costs, meter reading and the cost of failed suppliers.
- Consumption — kWh used in the period, taken from meter readings. If it says "estimated", the figure is a guess and the bill is provisional.
- VAT — domestic energy is charged at 5%, not the standard 20%. Rates quoted on this site include it; some suppliers quote excluding VAT, which is why two sources can disagree by exactly 5%.
Estimated readings, and why your bill jumped
If a bill is based on an estimate, the next actual reading corrects the whole period at once. That is the usual explanation for a bill that suddenly doubles: not a price rise, but a catch-up for months that were under-estimated.
A smart meter sending half-hourly readings removes the problem entirely, because there is nothing left to estimate. If you have one and the bill still says estimated, the readings are not reaching your supplier — worth a phone call.
Checking the rates are the ones you agreed
Compare the unit rate and standing charge on the bill against the current published rates for your tariff and region. They should match to the penny. Rates differ by region, so a figure quoted by someone in a different part of the country is not a useful check — find your region first, then look up live rates for it.
If you are an Octopus customer, connecting your account here prices your own half-hourly readings against your own tariff, so you can see the bill rebuilt from the meter up on the usage page.
Common questions
What is a kWh?
A kilowatt hour is the energy used by a 1 kW appliance running for one hour. A 2 kW fan heater on for 30 minutes uses 1 kWh; a 10 W LED bulb takes 100 hours to use the same.
Why is there VAT on my energy bill?
Domestic gas and electricity are charged VAT at the reduced rate of 5%. Business supplies are usually charged at 20%.
What does "estimated reading" mean on a bill?
It means no meter reading was received, so the supplier calculated your usage from your past pattern. The next actual reading trues the account up, which can produce a large correcting bill.
See it on your own numbers. halfhourly.uk shows live half-hourly prices for every GB region for free, and if you connect an Octopus account it prices your own smart-meter readings against every tariff.