Typical household - typical bill - what does this meaningless gibberish actually mean?

[Deleted User]

The headlines are indeed hideous - are frequent and serve only to worry people. So what exactly is a typical bill?

MSE_Andrew

Hi Deleted_User

A typical bill is based on a certain amount of usage that regulator Ofgem regularly updates. It is a way of giving an average figure.

It considers this usage as what a typical household in the UK uses every year. The amounts are:

Gas: 12,000 kilowatt hours

Elec: 2,900 kilowatt hours

As energy prices vary quite considerably depending what region you live in and how much you use, typical bills are a useful tool for us and the rest of the energy market when comparing the price of tariffs, or when looking at how much the price cap is.

So when you see a ‘typical bill’, it’s worked out by taking the rates, multiplying them by the typical usage amounts (as above), and the adding the standing charges over 365 days. It’s also worth noting that typical bills are an average of pricing across the UK – the domestic GB energy market is split in to 14 regions and the actual rates and standing charges people pay vary quite a bit between these regions. So when working out typical bills, the rates and standing charges are averaged across these regions.

Hope this helps! 

Andrew Capstick - MSE Energy Expert

This question and answer came about during the MSE Forum 'Ask An Expert' event. It won't be updated so may no longer be correct at time of reading. This info does not constitute financial advice: always do your own research on top to make sure it's right for your circumstances.

Ask an Expert: Energy (Aug 2022)

[Deleted User]

Thank you for the reply.