What is the average gas and electricity bill in the UK?

The current average Great Britain energy bill

Energy bills remain a major part of household spending. Over the last few years, the cost of gas and electricity has seen massive changes, driven heavily by global events that affect the price suppliers pay for wholesale energy. For example, the Ofgem price cap rose by roughly 13% in July 2026, largely because wholesale gas costs jumped by 28%.

When you look at average energy bills, it helps to understand how the regulator measures them. Ofgem sets a price cap that applies to standard variable tariffs in Great Britain. To give people an idea of what this means in pounds and pence, they calculate an average annual bill based on what a 'typical' household uses.

However, the way this average is reported changed recently. On 1 July 2026, Ofgem updated its Typical Domestic Consumption Values. Because people are generally using less energy than they did a few years ago, Ofgem lowered its definition of medium usage. They dropped the assumed electricity use from 2,700 kWh to 2,500 kWh, and gas from 11,500 kWh to 9,500 kWh. Because of this change, the headline average bill looks lower at £1,663, even though the actual price you pay for each unit of energy went up. If you calculated the current cap using the older usage figures, the average bill would be reported as £1,862.

How the energy price cap actually works

A common mistake is thinking the Ofgem price cap is the absolute most you will pay for your energy in a year. This is not true. The price cap does not limit your final bill. Instead, it limits the maximum amount a supplier can charge you for a single unit of gas or electricity, and it caps the daily standing charge.

If you leave your heating on all day or run power-heavy appliances constantly, your bill will easily rise well above the £1,663 average. The cap simply makes sure that the underlying rates are fair and reflect the real cost of supplying energy.

It is also worth knowing that the Ofgem price cap only applies to standard variable tariffs in Great Britain. Northern Ireland has a different energy market and its own regulator. If you are on a fixed-rate tariff, the price cap does not directly apply to you, as you have already agreed to lock in your unit rates for a set period. However, the cap still acts as a benchmark, as suppliers usually price their fixed deals based on where they expect the cap to go next.

Average energy bills by house size

Because your bill depends on how much energy you use, a single person in a small flat will pay much less than a large family in a detached house. To make it easier to see how your bills compare, Ofgem breaks down typical usage into three consumption levels: low, medium,and high.^[1]

These annual figures are based on households that use both gas and electricity (dual fuel) and pay by Direct Debit. Rates can differ by payment method, so you should always compare the tariff available for your meter and how you prefer to pay.

A small flat typically uses less energy not just because it has fewer rooms to heat, but because shared walls with neighbouring flats act as natural insulation. A large detached house loses heat from all sides, which pushes gas usage up significantly.

Breaking down gas and electricity costs

When you look at your energy bill, you will notice that gas and electricity are priced very differently. Electricity is much more expensive per unit, but most households use far more gas over the year to keep their homes warm and heat their water.

Under the July 2026 price cap, electricity is capped at 26.11p per kWh, while gas is capped at just 7.33p per kWh. However, because a medium household uses 9,500 kWh of gas compared to just 2,500 kWh of electricity, the total yearly cost for each fuel ends up being quite similar.

On top of the unit rates, you also pay a daily standing charge for each fuel. This is a fixed daily fee that covers the cost of keeping your home connected to the energy grid, regardless of whether you use any energy that day.

When you add these together, a typical household pays around £315 a year just in standing charges. Because these charges remain high, low-energy users still face substantial baseline costs. Cutting your usage will lower your unit costs, but it will not eliminate this fixed cost of grid connection.

Where does your money actually go?

It is easy to assume that energy suppliers keep most of the money you pay them as profit, but the reality is more complicated. Your bill is made up of several different costs, many of which your supplier has no control over.

The biggest single chunk of your bill goes towards wholesale energy costs. This is the price your supplier pays to buy the gas and electricity on the open market. While it goes up and down based on global supply and demand, wholesale costs currently make up roughly 40 to 50% of your total bill.

Another large portion, up to 25%, goes towards network operating costs. This pays the companies that build, maintain, and upgrade the gas pipes and electricity wires that run across the country. When lines need to be repaired after a storm, or new infrastructure is built, these network costs cover it. These costs are recovered through a mixture of unit rates and standing charges.

Your bill also includes taxes and government levies. These levies fund social schemes and green initiatives, such as grants for low-income households and investments in renewable energy. Finally, a small percentage covers the supplier's own operating costs, customer service, and a regulated profit margin.

Why your bill might be higher than average

If your bills are much higher than the £1,663 average, it does not necessarily mean your supplier is overcharging you. Several practical factors change how much energy a home needs to use.

Regional differences play a small but real part in your costs. Supplying electricity to remote areas with fewer homes requires more infrastructure per person than supplying a dense city. Because of this, the unit rates and standing charges set by Ofgem vary slightly depending on your local network region.

Government schemes to help lower your bills

Upgrading your home so it uses less energy is the best way to protect yourself from high unit rates. However, things like insulation, heat pumps, and solar panels require a large upfront investment. To help with this, the government currently offers several schemes to reduce the cost.

The Boiler Upgrade Scheme provides upfront grants to help homeowners in England and Wales replace fossil fuel heating systems with a heat pump. The standard grant is up to £7,500. As of July 2026, this was increased to £9,000 specifically for homes that are off the gas grid and rely on expensive oil or LPG heating.

For lower-income households, the ECO4 scheme places a legal rule on large energy suppliers to fund insulation and heating upgrades. This scheme helps those who receive certain benefits improve their home's energy efficiency, but it is currently set to close on 31 December 2026. As well as this, the newly launched Warm Homes Plan aims to upgrade millions of homes by 2030. It sets out plans for low- and zero-interest loans for measures including solar panels and batteries, alongside support for low-income households.

Even if you do not qualify for a direct grant, you can still save on the installation costs. The government has set a 0% VAT rate on energy-saving materials, meaning you will not pay any VAT on solar panels, home batteries, heat pumps, or insulation until March 2027.

Practical ways to cut your energy costs

While you cannot control wholesale energy prices or standing charges, you can control how much energy you draw from the grid and what tariff you pay for it. Taking a few practical steps can make a noticeable difference to your annual costs.

Switching suppliers regularly used to be the main way to save money. While the market has changed and massive savings are harder to find, it is still worth keeping a close eye on your contract. When a fixed deal ends, your supplier will usually move you onto their standard variable tariff. This is a good time to compare the market and see if another supplier is offering a better fixed rate.