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A guide to household bills

  • 16, Aug 2020
  • Read time: 12 mins

This guide to household bills will set out how much it costs to run a home, ensuring you’re not paying more than you need, wasting hundreds of pounds every year.

Woman on laptop.

Some expenses pop up like clockwork. Others vary from month to month. From energy bills to council tax to water to gas and electricity, we run through the average bills that UK households face every month and offer tips on how to keep on top of them.

Council tax

How much council tax we pay can differ greatly, from house to house and even from one street to the next.

Houses are classed into different bands by the local authority and council tax is charged according to these bands. It’s important that you are aware of any changes to your council tax band if you want to stay on top of your household bills.

The average Band D council tax bill in the UK

Using Band D as an example, in 2019 the average tax in England for band D homes was £1,750. This was up by an average of £79 on the previous year of £1,671. Adding this figure to other household bill increases will significantly alter your monthly budgeting.

Council tax will also differ greatly depending on your local authority. Again, using Band D as an example for 2020-21, within London alone council tax can vary between just over £780.28 in the borough of Westminster to £1,501.63 just across the River Thames in the borough of Lambeth.

Stay on top of how much you pay for council tax by checking your council tax band here.

Gas and electricity

You can choose to pay quarterly, monthly or annually for your gas and electricity.

Paying quarterly or annually means you will be sent a statement for the exact amount of gas and electricity you’ve used, provided you’ve been supplying them with accurate meter readings. At the end of each period you’ll be billed for that amount.

Monthly direct debits can be a good way of avoiding paying a large sum every quarter or year. Your energy provider will work out an estimate of what you’re likely to use over 12 months and then spread that amount across 12 monthly direct debits.

If your usage proves to be more or less than anticipated, then the direct debit amount will be calculated to try and avoid any surplus or shortfall in your account. If you end up in credit, some energy providers will offer an interest rate on the amount while it sits in your account.

Smart meters are an excellent way of staying on top of your energy usage. They help you to see how much gas and electricity you’re using each day, both in money terms as well as energy units.

There are different tariffs to choose from and when you get your bill, at least you know it’s accurate. The smart meter sends data directly to your supplier. 

The average gas and electricity bill in the UK

According to a government report average annual household energy bills rose by £55 to £1,289 in 2019. Of course, these amounts can fluctuate depending on the size of your house and region.

How to lower your gas and electricity bill 

With many utility firms raising their prices, opting for fixed price tariffs can help to combat price hikes. Shopping around when your fixed period is coming to an end is another option.

It’s also worth considering dual fuel tariffs, rather than having separate providers for gas and electricity. These come with a discount, while online-only accounts also generally offer a discount over receiving bills and statements via post.


To assess whether you’re paying the right amount for your water usage it’s important to understand that rates vary greatly across the country, depending on the size of your locality and the availability of water in your area.

The average water bill in the UK

According to Water.org.uk the average UK water and sewerage bill for 2019-20 was £413.33.

How can I lower my water bill?

To lower your water bill you need to understand how companies calculate your water usage.

The first is unmetered and calculates a set rate that is decided upon by your home’s ‘rateable value’. It is based on your home’s size and location, along with other factors.

The second method is metered, where you are billed for the amount of water you actually use. If you feel your bills are high, try switching to a metered bill instead.

Phone, Broadband and TV

If you’re trying to find out how to save money on household bills, start by checking through your TV package and see what channels you watch regularly. Then decide if you need to be paying extra for them, especially sports and movie channels.

Also look at your broadband speed; use a speed checker to see what your maximum speed really is.

If it’s much lower than advertised, then it could be that your area isn’t capable of the higher speeds and it might be more cost effective to change to a less expensive package.

Be aware that before changing to a different phone, TV or broadband provider you could still be in contract and therefore are liable for a penalty for moving before the other contract ends.

To lower your phone, TV and Broadband bills try the following

  • Assess whether you need those premium channels and cut back on the ones you don’t use.
  • Pay attention to the hidden fees in your contract and shop around to see whether these fees are standard across all providers
  • Bundle your TV, Phone and Broadband package in one comprehensive monthly agreement and shop around for the best price.

Mortgage repayments

We love home ownership in the UK, but are we getting the best deal when it comes to paying our mortgage? Here are three steps to paying off your mortgage that may save you money in the long run.

Pay additional fees upfront

Read the details of your mortgage agreement and make sure that you’re only paying for your mortgage repayments, rather than additional fees that could have been more cost effective to pay upfront.

Once added to your mortgage repayments the likelihood is you’ll be paying interest on your additional fees as well as your repayments, which may increase your monthly payments.

Budget to overpay monthly and annually

One of the quickest ways of paying your mortgage is paying more than you need to every month or every year. So, if you’re due a performance-related bonus every year from work, set this aside to pay off your debt sooner.

You’ll have to check whether you’re agreement allows you to do this, and some lenders may incur a charge if you overpay by more than 10%, so check before you do – otherwise you’ll be rewarded with a hefty fee that wipes out the benefit of paying more than your owe.

Re-mortgage to cheaper deals

If you don’t re-mortgage to more cost effective mortgage deals throughout your repayment term, you could find that you’ll eventually end up paying your lenders standard variable rate. This means that the interest you pay on your mortgage could change every month.

In January 2019 the standard variable rate (SVR) was 4.9%. Now compare this to the average rate for a two-year fixed rate mortgage of 2.51%.

Without re-mortgaging you could end up paying thousands more for your home over the course of your repayment term.


Whether you rent or own a property, insurance is an important consideration when budgeting for household bills.

If you own a property, you will most likely have buildings insurance as a condition of your mortgage agreement.

When you rent your property your landlord/lady will have a certain level of insurance in place to cover their property, but this may not suit your demands and needs. It’s worth making sure you know exactly what’s covered as a result of an insured event.

What does buildings insurance cover?  

Buildings insurance covers the cost of rebuilding your home, should it suffer total damage, or more likely items such as walls, drainage, sheds and garages. It will also cover you for insured events such as burst pipes, falling trees and subsidence.

What does contents insurance cover? 

Contents insurance covers your possessions within the home against insured events. This includes electrical equipment from TVs, computers to washing machines, plus your furniture, curtains and clothes and personal effects such as bicycles, mobile devices and jewellery.

Home repairs and maintenance costs

If you’re wondering how much maintenance work to your property will cost over the duration of a year a good rule of thumb is to use the 1% rule.

If your property costs £200,000 to buy, then put aside at least £2,000 per year to pay for things such as roof repairs, boiler replacements or painting and decorating.

You may not spend the entire amount every year, but throughout the course of your home ownership this will add up and provide a suitable contingency fund should major renovations be needed unexpectedly.

TV licence

If you watch TV you’ll need a TV licence to pay for the live programs when they’re televised.

Remember, you only need a licence if you watch live TV or use the BBC app iPlayer. 

The licence will cost you £157.50 a year for colour TVs and just £54 per year for black and white sets.

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