Nine out of 10 people in the UK don’t know where their energy money actually goes.
It sounds crazy, but ask yourself: do you know how your bills are broken down? A poll of 5,000 adults found that only 14% could correctly name the different costs that make up a standard bill, and most people’s guesses were way off. It turns out the breakdown is quite different from what most of us assume, and understanding it might change how you feel about the whole thing.
Your bill is split into several different chunks.
When you pay your energy bill, that money doesn’t just go to your supplier. It gets divided up between several different areas: the actual cost of the energy itself, the networks that deliver it to your home, government policy schemes, and a portion going towards paying off a national energy debt. Each of those takes a slice, and some of those slices are a lot bigger than people realise.
Most people think of their supplier as the main beneficiary, but that’s not really how it works. The bill is more like a collection of different charges bundled together, and your supplier is really just the one collecting it all on everyone else’s behalf.
The real cost of the energy itself is nearly 40% of your bill.
This is the part that covers the actual gas or electricity you use, also called the wholesale cost. People guessed it made up around 19% of their bill on average, but the real figure is closer to 38%. That’s a large chunk, and it’s the part that fluctuates most depending on global energy markets, supply issues, and what’s happening geopolitically around the world.
When things like wars or trade disputes affect gas supplies, this is the part of your bill that tends to feel it first. That’s why so many people, around 39%, blamed global events when asked why energy prices have been going up.
Network costs are almost three times what people think.
This is one of the biggest gaps between what people believe and what’s actually happening. The network costs on your bill cover maintaining and running all the pipes, cables, and infrastructure that get energy from where it’s produced to your front door. People guessed this was around 12% of their bill. The actual figure is 28%.
That’s a massive difference, and it matters because these network costs are only going to grow. Around £108 is expected to be added to household bills every year by 2030 just to fund upgrades to Britain’s gas and electricity grids, but 63% of people have no idea that’s coming.
Supplier profits are tiny compared to what most people assume.
This one tends to surprise people. When asked how much of their bill goes to their energy supplier as profit, the average guess was 13%. The real figure is less than 3%. Suppliers are often seen as the villain when bills go up, and while there’s plenty of valid criticism to go around, the profit margin they’re actually taking is much smaller than most people imagine.
That doesn’t mean all suppliers behave well or that there aren’t issues with the market, but it’s worth knowing the numbers are nowhere near what the public assumes.
You’re helping pay off a £5 billion national energy debt.
This is the part that tends to make people feel a bit hard done by when they find out about it. Part of what you pay each month goes towards clearing a national energy debt that currently sits at around £5 billion. More than half of those surveyed, 56%, had no idea this was happening.
The debt built up over time, and the way it’s being cleared is through small contributions added onto everyone’s bills. There was no big announcement about it, and most people never noticed it appearing. It just gets absorbed into the total.
Policy costs are also sitting quietly on your bill.
On top of everything else, a portion of your bill funds various government schemes. These are called policy costs, and they cover things like subsidies for renewable energy, support for low-income households, and financing for projects like new nuclear power stations. Around 60% of people didn’t know they were paying these at all.
The debate around this is whether these costs should sit on energy bills or be paid for through general taxation instead. Only 18% of people think it’s fair that these charges appear on bills rather than coming out of tax revenue, and two thirds of those surveyed don’t feel the government is being transparent enough about what’s being added and why.
The switch to green energy is popular, but not if it costs more.
Just over half of people, 52%, say they support the transition to a low-carbon energy system. That support drops off pretty quickly though when bills are brought into the equation. If the transition meant energy bills rising by between 6% and 10%, support fell to just 34%. For a rise of 11 to 20%, only 17% said they’d still be on board.
More than half of those polled also feel that lower-income households are being left behind in the move towards greener energy. Things like solar panels, electric vehicles, and home batteries can reduce bills over time, but only 28% of people think these technologies are currently affordable for the average household.
Help that’s worth knowing about if you’re struggling.
If you’re finding it hard to keep up with your bills, there are a few routes worth looking into. The first step is contacting your supplier directly, as most have hardship schemes or repayment plans that can spread the cost if you’ve fallen into debt. These plans let you pay back what you owe in instalments rather than all at once, and suppliers are generally willing to negotiate if the initial offer doesn’t work for your situation.
Grants are also available through some of the major suppliers. British Gas customers can apply for help worth up to £2,000 through the British Gas Energy Trust, and you don’t actually need to be a British Gas customer to apply for their Individuals Family Fund. EDF, E.ON, Octopus Energy, and Scottish Power all have similar schemes for customers in financial difficulty, though the amounts and criteria vary.
The Priority Services Register is free and most people don’t know it exists.
If you or someone in your household is elderly, seriously ill, or has a disability, it’s worth registering for the Priority Services Register. It’s a free service that energy suppliers run, and it comes with some useful protections. These include advance notice of planned outages, free gas safety checks, and additional support if you fall behind on payments.
Getting on the register doesn’t affect your tariff or your credit, it just flags your household as one that needs extra care. You can sign up directly through your energy supplier, and it takes very little time to do.
The Warm Home Discount is still running, but you have to be eligible.
The Warm Home Discount is a government scheme that provides a one-off £150 payment to eligible low-income and vulnerable households to help with winter energy costs. It’s paid directly off your bill rather than as cash. The eligibility criteria are linked to certain benefits, so not everyone qualifies, but it’s worth checking if you think you might be entitled.
There’s an ongoing argument about who should be funding this scheme. Currently, the cost is spread across all energy customers through their bills, and 56% of those surveyed said they think that’s unfair. The alternative would be for it to come out of general government taxation, which is the approach a growing number of people believe would be fairer overall.
