Nearly nine out of ten Britons have no idea where their energy bill money goes, according to research commissioned by Utilita. A poll of 5,000 adults found that only 14% could correctly identify the main parts of an energy bill, such as operating, network and policy costs.
Misperceptions About Cost Drivers
When asked why prices are rising, 39% blamed geopolitical factors like wars and trade deals, while 21% pointed to inflation. However, Utilita highlighted that 'non-supplier' costs now account for nearly as much as the energy itself and are continuing to climb.
Respondents estimated that network costs made up approximately 12% of their bill, when the figure is closer to 28%. Supplier profits were overestimated at 13%, despite accounting for less than 3% on average. Wholesale energy costs were similarly underestimated, with the public guessing 19% compared to a reported 38%.
Hidden Charges in Energy Bills
The survey found many households are unaware they are paying for extras. More than half (56%) did not know customers are contributing to domestic energy debt through monthly bills – which Utilita claims totals around £5bn. Additionally, 60% had no idea they are paying policy costs for government schemes added to bills instead of being funded through general taxation.
Utilita CEO Bill Bullen said: "We want the nation to better understand what is pushing up energy bills, and what needs to change to bring down costs for households and create a fairer way to fund the energy transition."
Proposed Savings and Government Responsibility
Bullen estimated that funding network upgrades through government bonds rather than levies on bills would save households at least £108 a year by 2031. He also claimed ringfencing VAT from energy bills to fund a social discount could save bill payers a further £42, with discounts of up to £450 for those most in need.
Nearly half of respondents said it was the Government's responsibility to keep costs in check and support struggling households. Furthermore, 66% said they do not believe the Government is transparent enough about the non-energy and non-supplier costs added to bills. Utilita noted that 63% of the public are unaware £108 will be added to household energy bills annually by 2030 to fund necessary upgrades to Britain's gas and electricity grids.
Bullen added: "Better understanding of where our energy costs are coming from is just the first step to bringing them down. Following from this, there are clear and actionable steps that could be taken to ensure everyone is better off. Simple things like unlocking access to low-carbon technology installations for low-income households and moving the costs of government schemes off bills and into general taxation could help bring down energy costs - which is what we are calling for."
