Consumers remain baffled by their energy bill switch

SIX out of ten consumers still do not understand their energy bill a full two years after the introduction of reforms designed to make the information simpler and clearer.

Thursday, 7th April 2016, 8:06 am
Updated Thursday, 7th April 2016, 8:07 am
Customers are still baffled by their energy bills. Picture: John Devlin

Almost half of bill payers (48 per cent) say they have seen no difference to their statements and more than half (51 per cent) are unable to recall seeing any information about cheaper tariffs – a requirement of regulator Ofgem’s April 2014 reforms, the poll for comparison site found.

Of those who knew that the cheapest tariff is displayed on bills, fewer than half (47 per cent) had switched.

Younger consumers have the lowest level of bill comprehension, with 68 per cent of those aged 18-35 admitting they do not fully understand their statement, compared with 62 per cent of those aged 35-54 and 53 per cent aged 55 and over.

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Under Ofgem’s reforms, suppliers were also instructed to simplify confusing and complex tariffs, which were limited to four core tariffs per customer for both gas and electricity.

In its long-awaited report last month, the Competition and Markets Authority (CMA) claimed British households were overpaying by £1.7 billion on average a year for their energy and said the Big Six providers have been taking existing customers for granted.

The CMA said it planned to launch an Ofgem-controlled database allowing rival suppliers to offer new tariffs to those stuck on standard variable tariffs (SVTs) for over three years.

The CMA said too many households – 70 per cent of Big Six customers – were still on more expensive SVTs and could save more than £300 on average a year by switching.

Ann Robinson, uSwitch director of consumer policy, said: “The confusion around bills is a problem that must be tackled if consumers are to get in control of their energy use and spending.”

An Ofgem spokesman said: “Ofgem is committed to ensuring that consumers have the clearest information they need in their bills so they can make informed choices.

“We are currently reviewing these rules and are planning to trial new formats for bills with suppliers to make them easier to understand for consumers.”

Opinium surveyed 2000 bill-payers online during February.