UK households ‘bamboozled’ by energy bills
Most of us find gas and electricity bills puzzling.
Energy bills are by far the most perplexing of household bills, according to new research from Which?
In a survey of 1,600 people, three quarters (74%) of those who received energy bills ranked them as the most complicated.
Bills for landline phones followed as the second most baffling, with one in seven (14%) finding the information hard to grasp.
One in ten (9%) found their mobile phone bill complicated, 6% felt the same about their Council Tax and water bills, while 5% found it hard to understand their broadband bills.
Tackling confusing energy bills
Confusing energy bills still seem to be a problem despite new rules introduced by Ofgem last year to help curb the problem.
Energy suppliers can now only offer four simple core tariffs per fuel type, must use jargon-free language to explain bills and must supply personalised information on the cheapest tariff available to households.
Suppliers also have to include something called the Tariff Comparison Rate (TCR) in communications with customers, which can be used to compare tariffs as well as a Tariff Information Label, which sets out the key terms and conditions of a household’s current deal.
But Which? found only 30% of us are completely confident we could check the accuracy of our energy bills.
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Missing out on savings
One of the consequences of households not fully grasping what's going on with their bills is that they’re likely to fail to check they are on the best deal and as a result will spend more than they need to.
Separate Which? research shows that most households could save by moving to a fixed energy tariff.
Around three quarters of energy users are on their suppliers’ standard tariff, which on average have gone up 4% or £44 a year in the past two years. In contrast the cheapest fixed rate tariffs have dropped 7% or £83 a year in the last two years.
Which? executive director, Richard Lloyd said: “Despite efforts to make bills simpler to understand, our research shows people are still bamboozled. Consumers can’t tell whether they are getting a fair deal from their energy supplier and are losing out as a result.”
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What more can be done?
Which? thinks energy bills should be easy to understand and is calling on the Competition and Markets Authority (CMA) to make bills clearer by using simpler pricing via its Fair Energy Prices campaign. So far the campaign has more than 192,000 supporters.
The CMA is currently investigating the ‘Big Six’ energy suppliers following a referral from Ofgem. Which? hopes the CMA will consider the best way to establish a ‘price to beat’ and use directly comparable pricing, similar to petrol pump displays as part of its review.
Lloyd commented: “In a truly competitive energy market people should be able to spot the cheapest deal at a glance, making it easier to switch supplier.”
Decoding your energy bill
If you’re struggling with your energy bill you can find help on loveMONEY.
Read How gas and electricity bills are calculated for more and take a look at our regularly updated best-buy tables in The cheapest gas and electricity tariffs.
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