Utility bills in the UK: how are they calculated?

by | Apr 19, 2023 | Bills, Moving, Moving Guides

When you own or rent a property in the UK, it’s important to understand how utility bills are calculated. Utility bills refer to the various charges that you incur for the services you use, such as energy, water, Council Tax, broadband, and your TV licence. In this article, we will break down each of these utilities and explain how they are calculated.



💡 Energy bills

The cost of energy is calculated based on the amount of energy used in kilowatt-hours (kWh), plus a daily standing charge. Energy suppliers offer different tariffs, and the amount you pay will depend on your usage and the tariff you are on.


If you’re on a Fixed-Rate Tariff

A fixed-rate tariff refers to an agreement with your electricity supplier, where you are supplied with energy at a predetermined per-kWh cost and daily standing charge for a specified duration.

If you’re on a Standard Variable Tariff

When you don’t have an energy contract, you will be put on a Standard Variable Tariff by default. It’s what you’ll be charged for your energy usage when you move to a new place or when your previous energy contract ends. This tariff can change in cost at any time, but it cannot be higher than the Energy Price Guarantee. Currently, Standard Variable Tariffs are one of the most affordable energy tariffs you can get in the UK.

Your usage is usually measured by a smart meter, which sends readings to the supplier. If you don’t have a smart meter, you will need to provide readings yourself. The cost of energy bills can also be affected by government levies, taxes, and other charges.

What is a Standard Credit Meter, Pre-Payment Meter and Smart Meter? Learn more here


Reading an energy bill

Your energy bill should include your personal details, the amount of energy you’ve used (meter readings), how much you were charged and ways to pay your bill. Learn how to read your bill here


🚰 Water bills

The amount you pay for water usage can vary depending on several factors, such as the region you live in, the type of property you have, and your water consumption habits.


If you have a water meter

If you have a water meter, your water bills are calculated based on the amount of water you consume, which is measured in cubic meters (m3).

If you don’t have a water meter

If you don’t have a water meter installed or it’s not being used, you will be charged based on Unmetered Charges. This means your bills will be calculated using a yearly fixed amount and a charge that depends on your property’s value.

If you think you use less water than most people, you could pay less by changing to a metered charges plan!


Wastewater bills

Wastewater is the term used for the water that is removed from your property, also known as sewerage. Usually, the same company that manages your clean water will also manage your wastewater, but sometimes a different company handles it. In such cases, your main water supplier will arrange billing for the wastewater service, and you will get bills for both clean and wastewater through the mail.

Not sure how to read your water bill? Learn more here


🏠 Council tax

Council tax is a tax that is charged by local authorities in the UK to fund public services. The amount of council tax you pay is calculated based on the value of your property, with discounts available for sole occupants and full-time students, among others. Each property in the United Kingdom is assigned a Council Tax band ranging from A to H, based on its 1991 market value.

Table showing UK council tax valuation bands

The local council determines the Council Tax amount for each band as part of its budget, resulting in varying tax payments for properties within the same band due to location differences. Therefore the amount you pay for Council Tax will vary depending on the area you live in, the value of your property, and any discounts you qualify for.

You can find out the COuncil Tax charge for your property using our Council Tax Checker


Registering for Council Tax

With over 400 councils in the UK, the process of registering for Council Tax can be quite diverse. Although several councils have adopted an online system to simplify the process, there are noticeable inconsistencies in the data they require.

The good news is you can simplify the process of organizing your Council Tax by using Please Connect Me. Sign up today and we’ll take care of registering you with your council!


📶 Broadband bills

Broadband bills are usually calculated based on the type of broadband service you have and the download speed you choose. Your broadband provider will send you a bill every month.

The amount you pay for broadband usage can vary depending on several factors, such as the type of broadband service you have, the connection speed you choose and any additional services you subscribe to such as TV or phone. Broadband providers typically offer various packages at different speeds and price points.

Looking for great broadband offers? Sign up & let us look into it for you!


📺 TV licence

A TV licence is a legal requirement in the UK if you watch or record live television broadcasts. The licence fee is used to fund the BBC’s public services, such as television, radio and online content. The licence fee is a flat rate, and you can pay it annually or in instalments.

The amount you pay for a TV license is fixed and is currently £159 per year. You can pay for your TV licence online or by direct debit, and you may be eligible for a discount if you are blind or have a severe vision impairment.

Do I need a TV licence?


Understanding how utility bills are calculated in the UK can help you manage your finances and ensure that you are paying the right amount for the services you use. By understanding the factors that influence your bills, you can make informed decisions about your energy and water consumption habits, choose the right broadband package, and ensure that you are paying the correct amount of council tax and TV license fees.

If you’re moving, sign up to Please Connect Me to get all your utilities connected – and save up to £309 on bills with our exclusive offers

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