Students paying £1,500 extra for ‘concerning’ energy bills

Supporting returning students to avoid expensive utility packages is one of the goals of a new Energy Advice Service launched at the University of Reading.

Research by Reading Students’ Union has shown how students using so-called ‘unlimited’ energy packages in private rented accommodation pay an average of £1,500 more per household annually, compared to those setting up more traditional contracts with individual utilities suppliers (based on data for ‘high’ energy usage). For ‘medium’ energy usage, that average can be up to £2,200 per household.   In extreme cases (based on ‘high’ energy usage figures), students could be asked to pay up to £2,690 more per year than they would typically pay using traditional energy providers. The data was obtained in March 2025 and prices may have since varied.

The students’ union's research found some student-focused letting agents are receiving commission for recommending expensive ‘unlimited’ packages. While students may think these deals are easier to setup and provide convenient fixed payments, many may be paying significantly more overall.

Professor Robert Van de Noort, Vice-Chancellor at the University of Reading, said: “Companies are selling expensive energy contracts to young people that many may not need during a cost-of-living crisis. Many students are paying utilities bills for the first time, and it is very concerning to see companies targeting them to sign up for contracts that encourage profligate energy use or charging them for more than they need. This could be a national issue affecting thousands of vulnerable students all over the UK, not just those in Reading. We're calling on universities and energy regulators to help students push back against this worrying trend.”

Dan Fernbank, Energy & Sustainability Director at the University of Reading, said: “Unlimited energy contracts are a popular option for students living with new friends because they prevent arguments about who pays what. But beyond the financial impact, these packages promote environmentally unfriendly practices by encouraging unlimited energy use. We want to empower students with the knowledge to make informed choices about their energy supply and avoid unnecessary extra costs and energy use.”

Comparing providers

The research examined nine unlimited energy providers, (HOUSR Bills, Epic Student Bills, oneutilitybill.co, Student Energy Group, FUSED, Split the Bills, Huddle, Uni Homes, Resooma, and Student Bills Company), comparing them against quotes from British Gas, EDF, Octopus, OVO and E.on. For a typical four-bedroom property in Reading's student area, individual contracts covering water, Wi-Fi, and energy would cost around £280 per month based on ‘high’ usage (or £223 per month based on ‘medium’ usage), compared to £408 for unlimited packages. 

Ellie Buckley, an Education student in her second year, will pay £76 in bills every month on an ‘unlimited’ contract. Ellie said: “We signed this contract in January 2025 as the energy company said if we did not, prices would rise. I wish I knew more about paying bills, as if I had, I may have not chosen to use a student utilities company as they tend to charge more and their customer service has been very poor.”

Jenny Smart, a third-year Business Management student, set up her bills with individual providers, and pays £48.78 a month for her utilities. Jenny said: “My social media is filled with adverts from suppliers promoting unlimited energy contracts. They say they make paying bills easier and could even save me money, but we did the maths and paid much less using direct suppliers. I worry a lot of students moving in together for the first time will be persuaded to go with the easy option and lose money that could be spent on more important things.”

Energy Advice Service goes live

The new service aims to teach students about energy efficiency and how to save money by educating students about the true cost of unlimited packages. The service will provide practical guidance and 1-2-1 support on how to save energy, as well as guidance on setting up traditional utility contracts, which typically involves arranging separate accounts for electricity, gas, water and internet. Students can sign up to the Reading Students’ Union mailing list to stay updated on energy advice and access resources. The campaign aims to have national impact, helping students across multiple universities make better-informed decisions about their energy contracts.

Consumers should make their own enquiries and seek independent advice in order to make their own informed decision to suit their individual circumstances when seeking to take out an energy contract. 

Notes to editors: 

About the research:

• The research was carried out by the Reading Students' Union in discussion with the University of Reading Sustainability team in March 2025 by obtaining quotes for energy prices for a four-bedroom property, with four occupants, in East Reading (3 Cardigan Gardens) from a range of utility suppliers. The quotes cover energy, water and broadband – typically unlimited for energy and water and 400 mbps for broadband.

• Nine quotes were obtained from ‘all-inclusive’ energy suppliers. Five energy quotes from ‘pay as you go’ suppliers were obtained, based on Ofgem typical consumption figures both for average and high usage (High Usage = 4,100 kWh electricity and 17,000 kWh gas, Medium usage = 2,700 kWh of electricity and 11,500 kWh gas – source: https://www.ofgem.gov.uk/information-consumers/energy-advice-households/average-gas-and-electricity-use-explained), to which broadband costs and water costs were added, based on a Virgin 362 mbps quote, with water from Thames Water.

• The research shows monthly costs across the unlimited suppliers ranged from £335.75 to £496.43 (average £407.72), compared with a range of £271.96 to £300.13 (average £280.63) for ‘high’ energy usage and  a range of £217.08 to £235.92 (average £222.55) for ‘medium’ energy usage across the pay-as-you go suppliers. This equated to a difference in average costs of £127.09/month (£1,525.08/year) for ‘high’ energy usage and £185.17/month(£2,222.10/year) based on ‘medium’ energy usage. The maximum range between the cheapest pay-as-you-go and most expensive all-inclusive supplier was £2,693.94 (based on ‘high’ usage figures) and £3,286.52/year (based on ‘medium’ usage figures).
• Comparisons were made against both ‘high’ and ‘medium’ energy consumption figures. Ofgem guidance indicates a 4-bedroom property would typically be considered to have ‘high’ energy usage based on annual consumption, however as students receive circa 30 weeks of teaching per academic year and are therefore typically absent for long periods of time with energy consumption often low in those periods, we have also offered the ‘medium’ usage figures which may also be reflective.