Your electricity bill is made up of a standing charge and a unit rate – Ofgem explains the two-part structure.
Every domestic electricity bill in Great Britain follows the same two-part structure set by energy regulator Ofgem. The standing charge is a fixed daily amount, measured in pence per day, that covers the cost of connecting your home to the grid, maintaining the network, and operating the meter. Ofgem sets a maximum standing charge for each region under the energy price cap (Ofgem, 2026).
Your electricity bill is made up of a standing charge (around 53.7p per day) and a unit rate (about 27.9p per kWh) for direct debit customers in 2026. The total is calculated as standing charge times days, plus unit rate times kWh used. Compare tariffs to find the best deal.
- Know the two-part structure: standing charge plus unit rate.
- Standing charge covers grid connection and meter upkeep.
- Unit rate is around 27.9p per kWh on direct debit (2026).
- Medium household pays about £1,738 per year on average.
- Check your bill for exact kWh used and meter readings.
- Your electricity bill is made up of a standing charge and a unit rate – Ofgem explains the two-part structure.
- Quick numbers – what a typical household pays per kWh and per day in 2026
- Your bill shows exactly how many kWh you used – here is how to read the meter reading and usage line
- How your tariff type – fixed, variable (standard variable), or time-of-use – changes what you pay per kWh
- How electricity bill pay works – the direct, plain-English answer for a homeowner
- Who to trust to install your meter or switch your tariff – MCS, TrustMark, and Ofgem's supplier register
- What happens if you do not pay your bill – Ofgem's rules on debt collection and disconnection
The unit rate is the price you pay for each kilowatt-hour (kWh) of electricity you actually use. One kWh is roughly the amount needed to run a 1,000-watt appliance for one hour. Your unit rate can be fixed for a set period or variable, depending on your tariff.
Your total bill is calculated as: (standing charge × number of days in the billing period) + (unit rate × total kWh used). The Energy Saving Trust provides a worked example of this calculation on its website (Energy Saving Trust, 2026).
Quick numbers – what a typical household pays per kWh and per day in 2026
The table below shows the rates under the Ofgem energy price cap for April to June 2026, plus the annual average consumption for a medium household (2–3 people) from the Department for Energy Security and Net Zero (DESNZ).
| Bill component | Direct Debit customer | Standard Credit customer |
|---|---|---|
| Standing charge per day | 53.7p | 57.2p |
| Unit rate per kWh | 27.9p | 29.7p |
| Annual average bill (medium household) | £1,738 | £1,852 |
| National average annual consumption (medium household) | 2,900 kWh | |
Source: Ofgem energy price cap rates effective April 2026 (Ofgem, 2026) and DESNZ “Energy consumption in the UK” release (DESNZ, 2026).
Your bill shows exactly how many kWh you used – here is how to read the meter reading and usage line
Your electricity bill includes a “meter reading” section that shows the current and previous readings, usually in kWh. The difference between these two readings is your actual consumption for the billing period. If you have a smart meter, readings are sent automatically to your supplier. If not, you must submit manual readings to avoid estimated bills, which can be inaccurate (Energy Saving Trust, 2026).
The “usage line” on your bill shows your consumption in kWh alongside a comparison with the same period in the previous year. This helps you spot whether your usage has gone up or down. If the number seems unusually high, check for a faulty appliance or a change in your household habits.
Most suppliers also show a graph of your daily or monthly usage on your online account. This can help you identify patterns, such as high usage on specific days.
How your tariff type – fixed, variable (standard variable), or time-of-use – changes what you pay per kWh
Your tariff type determines the unit rate you pay per kWh. A fixed tariff locks your unit rate for a set period, typically 12 to 24 months. This protects you from price rises but means you will not benefit if market rates fall. A variable tariff, including the standard variable tariff (SVT) covered by the price cap, changes with the wholesale energy market (Ofgem, 2026).
Time-of-use tariffs charge different rates at different times of day. Economy 7 and Economy 10 tariffs offer a lower night-time rate and a higher daytime rate. Smart tariffs, such as those offered by Octopus or EDF, can vary by half-hourly periods. Your bill will show separate unit rates for each time period.
Switching tariffs can change your annual bill by hundreds of pounds. Ofgem’s “Cheapest tariff” comparison tool shows current market rates for your postcode (Ofgem, 2026).
How electricity bill pay works – the direct, plain-English answer for a homeowner
Your electricity bill is a simple sum: (standing charge × days in the billing period) + (unit rate × kWh used). The standing charge covers fixed costs like meter rental and network maintenance. The unit rate covers the electricity itself.
You pay this total through one of three methods. Direct debit is the most common and usually the cheapest, with a discount applied by most suppliers. You pay a fixed monthly amount based on your estimated annual usage. Cash or cheque payments are made quarterly, typically at a higher rate. Prepayment meters let you pay as you go, topping up with a card or key (Energy Saving Trust, 2026).
Your bill shows your consumption in kWh, the rates applied, any discounts or credits, and VAT at 5%. The final line is the amount due. VAT on domestic fuel is set at 5% by law (GOV.UK, 2026).
Who to trust to install your meter or switch your tariff – MCS, TrustMark, and Ofgem’s supplier register
For a smart meter installation, your energy supplier must be licensed by Ofgem. You can check your supplier’s licence on the Ofgem supplier register (Ofgem, 2026).
If you are switching to a time-of-use tariff that requires a new meter, such as Economy 7, the installer must be registered with TrustMark for general electrical work (TrustMark, 2026). If the switch involves a heat pump or solar panels, the installer must be certified under the Microgeneration Certification Scheme (MCS) (MCS, 2026).
For any tariff switch, use a price comparison site certified by Ofgem’s Confidence Code, such as MoneySavingExpert or uSwitch. These sites show all available deals from licensed suppliers (Ofgem, 2026).
What happens if you do not pay your bill – Ofgem’s rules on debt collection and disconnection
If you miss a payment, your supplier must give you at least 28 days’ notice before disconnecting your electricity. They cannot disconnect you if you are vulnerable, which includes being over 75, having a medical condition, or living with a child under five (Ofgem, 2026).
Suppliers must offer you a repayment plan based on your ability to pay, not a fixed amount. Ofgem’s Warm Home Discount scheme provides a one-off payment to eligible low-income households. The Fuel Direct scheme allows you to have debt payments deducted directly from your benefits (GOV.UK, 2026).
If you are in debt, you can switch supplier if you clear the debt first, or if your current supplier agrees to a “debt assignment” to the new one. You cannot be forced to stay with a supplier because of debt.
understanding energy tariffs and how to switch
what to do if you cannot pay your energy bill
Frequently Asked Questions
A daily fixed fee covering grid connection and meter maintenance. Ofgem sets a maximum standing charge under the price cap, currently 53.7p per day for direct debit customers (Ofgem, 2026).
Total bill = (standing charge u00d7 days) + (unit rate u00d7 kWh used). For example, a medium household using 2,900 kWh per year pays around £1,738 on direct debit (Energy Saving Trust, 2026).
For a medium household on direct debit, the average monthly bill is about £145. This is based on the Ofgem price cap rates for April to June 2026 (Ofgem, 2026).
Under the Ofgem price cap, the unit rate is 27.9p per kWh for direct debit customers and 29.7p for standard credit customers (Ofgem, 2026).
A fixed tariff locks your unit rate for a set period, while a variable rate can change with the market. The energy price cap applies to default variable tariffs (Ofgem, 2026).
