Telegraph miscalculates the cost of working from home

2 September 2022
What was claimed

Working from home will add more than £2,500 a year to the average household’s energy costs.

Our verdict

This figure comes from a flawed calculation, which assumes that the cost of energy used each month is as high as it is in January. The Telegraph and other outlets have since published corrections. There are other questions about the underlying figures too, the details of which have not been published in full.

What was claimed

Employees are likely to be better off by £1,500 next year if they go out to work rather than working from home.

Our verdict

This is also unreliable. It is based on the flawed £2,500 energy cost estimate and another flawed calculation for the cost of commuting by car, which only considered the cost of fuel.

Working from home will add more than £2,500 a year to already soaring energy bills, analysis has found.

A front-page article in the Telegraph earlier this week incorrectly used new analysis to claim that working from home will add more than £2,500 a year to energy bills, and said this meant commuters would be likely to save £1,500 by going out to work instead of staying at home.

The Telegraph appears to have multiplied by 12 the expected energy savings in January 2023, as estimated by the price comparison website Uswitch. This calculation is flawed because energy usage is much higher in January than in an average month.

Uswitch’s estimate may also not be reliable, for instance because it makes assumptions about the way that people use their heating that are different from official data on the subject.

The Telegraph’s estimate for commuting costs is also incomplete, and may be too low for many people.

In practice, the real costs of commuting and working from home will vary widely from household to household, so many people’s experience will be very different from the average anyway.

The Telegraph has partially corrected its article after Full Fact got in touch. MailOnline and Sky News have also corrected articles on the same subject.

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What the Telegraph said

The Telegraph article quoted forecasts by Uswitch on the cost of domestic energy bills next year.

Uswitch said that in January 2023, when a new quarterly price cap period will begin, “the average household will be paying £580 a month for their energy, compared to £789 for those who are working from home”.

Based on these figures, the Telegraph article said: “This equates to £209 a month and £2,508 a year.”

How it miscalculated

Uswitch told Full Fact that the £209 figure refers to its estimated saving in January 2023 specifically, based on people’s use of energy at that time of year.

We don’t know exactly how it reached that estimate and whether it’s based on typical consumption in winter generally or January in particular. But either way, you can’t simply multiply £209 by 12 to get an annual figure, as the Telegraph seems to have done, because this would be like making a year out of 12 Januaries.

Uswitch confirmed to us that multiplying by 12 would give an inaccurate result, and its press release says: “Working from home during the colder months of the year is obviously going to be more expensive as employees are likely to need their heating on during the day.”

Energy bills are made up from a mixture of standing charges and usage costs for both electricity and gas, and because we don’t know exactly how Uswitch calculated its figures, we can’t adjust them precisely to take account of the seasons.

However, typical domestic consumption figures shared with us by energy analysts Auxilione show that electricity consumption is about 22% higher in January than in an average month, and gas consumption is about 90% higher. This suggests that the Telegraph calculation may overestimate the total energy cost of working from home significantly.

The £209 estimate from Uswitch is based on the January 2023 price cap, and therefore takes no account of any possible further energy price rises, which have been forecast by some analysts for 2023. If these happen, the additional energy costs of working from home will also rise. But of course the future prices are unknown.

Are Uswitch’s estimates reliable?

Uswitch hasn’t published the full details of how it calculated its estimates.

Its press release says that its calculations assume households where someone works from home would use their heating system for 24 hours a day, compared with 14 hours in a household that was unoccupied during the day—thereby raising its spending on gas on weekdays by about 71%. It also assumed that work-from-home households use 25% more electricity.

We don’t know how Uswitch applied this additional use to produce its estimated figure for January, but these assumptions may not be reliable.

A 2017 government survey of domestic energy behaviour found that households with someone in all day heated their homes for an average of 8.5 hours, compared with six hours for households where no-one was in during the daytime.

This suggests that people who work from home would use their heating for about 2.5 hours (42%) more than unoccupied households, not 10 hours (71%) more, as Uswitch assumed.

There are other questions over Uswitch’s figures too. For example, it seems likely that it assumed people continue to heat the same proportion of their homes while they are working during the day as they do in the evening, rather than only heating the room they work in.

And it’s also not clear whether its estimates account for households having multiple occupants. Of course, some households contain more than one person during working hours, meaning that if one of them started commuting there would be little energy saved unless the others also left the house.

When we put some of these questions to Uswitch, it told us: “During the energy crisis we have done our best to explain to consumers how soaring wholesale costs affect household bills, and it is indisputable that the cost of working from home is rising.”

What about commuting costs?

The Telegraph article compared the additional energy cost of working from home with the additional cost of commuting, and concluded: “Even though returning to the office could mean adding commuting costs, employees are still likely to be better off by £1,500.”

This seems to be based on its first mistaken calculation, that working from home would increase annual energy costs by £2,508, from which the Telegraph subtracted a separate estimate that “the average commute by car costs £1,006 a year”.

The article explains that this number was made by combining figures from other sources:

  • The latest pump prices from the RAC, which are 169.6p/litre (or 770.9p/gallon) at the time of writing
  • Confused.com’s estimate that the the average daily commute adds up to 5,040 miles a year
  • Estimates that the typical car in the UK runs 38.8 miles per gallon, according to “data from research firm NimbleFins

These estimates have all indeed been published, and combined they do show that someone driving 5,040 miles in the typical car would need 129.9 gallons of fuel, which at a cost of 770.9p/gallon would mean spending just over £1,000 on fuel in total.

However, this overlooks the other expenses usually associated with driving, such as road tax, repairs, depreciation, insurance and parking. Indeed NimbleFins itself estimated in June that the real total cost per mile of driving is about 47p. Multiplying that by 5,040 miles would give a much higher annual commuting cost of about £2,370.

Last February, Confused.com also estimated the weekly cost of commuting by car, which it put at £80. If you assume that people commute to work for 47 weeks per year, that produces an annual commuting cost of £3,760.

We’ve not studied these estimates in detail, so we’re not sure how accurate they are. But both suggest the Telegraph figure for the average cost of commuting may be a significant underestimate—and indeed the Confused.com figure is more than the Telegraph’s own (flawed) estimate that the additional energy cost of working from home is £2,500 a year.

While driving is by far the most common way people commute to work, it is also not the only way. For people who walk or cycle, the cost of commuting is likely to be very small. For others, who use public transport, the costs may be even higher than driving.

Confused.com estimates a weekly cost by bus of £76, and by train of £136. The Telegraph itself reported on 17 August that the current price of the typical annual rail season ticket was £3,263, and that this is forecast to rise by £433 next year.

If a household contains more than one person who works from home, then it would also have to pay more than one person’s commuting costs in order to leave the home empty during the day.

There may also be other costs and benefits associated with commuting, such as changes in the cost of food and drink, and potential savings in other travel costs if someone who commutes is able to use other services near their workplace.

In short, although people’s commuting costs will vary widely—from almost nothing to several thousand pounds—the Telegraph’s calculations do not reliably show that on average people who commute to work “are still likely to be better off by £1,500”, or indeed that commuting to work will on average be cheaper than working from home and paying additional energy costs.

Image courtesy of Magnet.me

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After we published this fact check, we contacted the Telegraph to request a further correction to its article. 

The Telegraph did not respond.

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