Energy News

Even accountants can’t work out their energy bills

Thursday 22 September, 2011

By Martin Fagan - news@consumerchoices.co.uk

Complicated energy tariffs confuse even financial professionals, says new research from Which?

Energy tariffs are so complicated that even an accountant could not calculate how much they should be paying, according to the latest research from Which?.

Having long argued that energy companies construct their tariffs in order to purposely confuse customers, Which? decided to construct a test to see how comprehensible energy bills actually are.

The consumer champion asked 36 people - including a solicitor, an engineer and an accountant - to work out their domestic energy bill using nothing but information from the supplier's website. Just one - a company director - could do it.

Which? said this deliberate complexity concealed bad deals for customers. According to the watchdog, energy tariffs are riddled with tricks and caveats designed to cost people more money, including tiered pricing that penalises low users and discounts that don't materialise if consumers leave before a set period.

As 2011 has so far seen each of the “big six” energy companies increase gas and electricity prices on two separate occasions, Which? says it's vital consumers are able to work out their bills and check they're paying the right price.

“When even an accountant struggles to calculate their bill, it shows the whole billing system is far too complicated,” said Richard Lloyd, executive director at Which?

“There are straightforward ways consumers can cut their bills - for example by switching to online deals or paying by direct debit. But that won't help people to pick the best tariff for them. So Which? wants the regulator to stamp out excessively complex tariffs, across the board,” he added.

Which? is launching an Affordable Energy Campaign to help people spend as little as possible on gas and electricity.

The first stage is urging Ofgem to introduce one simple format for all tariffs as part of the regulator’s ongoing review of the retail market. This would allow people to compare different tariffs at a glance and easily spot the cheapest deal for them.

Tim Yeo MP, chair of the energy and climate change select committee also commented: "I welcome Which?'s investigation into the complexity of energy tariffs,” he said. “The enormous number and unnecessary complexity of tariffs prevent consumers making easy comparisons and hinder switching.”

Which? is also asking people to email Ofgem's chief executive Alistair Buchanan asking him to tackle tariff complexity.