Why do people still not understand their energy bills?
If looking at energy bills gives you a confusion-induced headache, you're definitely not alone


Get the best money-saving tips, tricks and deals sent straight to your inbox every week. Make sense of your money in partnership with The Money Edit.
Thank you for signing up to The Money Edit. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.
A poll of over 2,000 households by Engie found that one in five people don't understand their energy bills.
The issue of befuddling bills is hardly a new one. In 2014, Ofgem introduced a number of major reforms that were supposed to make bills simpler, clearer and fairer for consumers.
Tariffs offered by gas and electricity suppliers were streamlined, price comparisons on bills became mandatory and new standards were put in place to ensure that companies speak to their customers in clear, jargon-free language.
Yet years on from these changes, many customers feel none the wiser. So why are energy bills still so confusing, and what should be done about it?
All in the details
"Most people know energy is measured in kWh, and that pre-payment is a more expensive way to buy energy," says Aled Stephens, an insight and analytics consultant at Energy Saving Trust.
"However, knowledge of different energy sources is much lower. Most people do not know which fuels are more expensive than others - for example, that electricity is more expensive than gas - so there's still work to be done."
Further confusion arises when it comes to understanding the variation in prices from different energy suppliers.
(MORE: How to find the best energy deals)
Alex, a graduate research assistant from South Wales who recently purchased her first home with her partner, feels these differences in cost should be better explained.
"I really don't understand how different companies charge such different rates," says Alex. "We're currently paying about £99 per month for gas and electricity from our current provider, yet when we look on comparison sites we're getting quotes for £60-£70 per month."
Alex isn't the only one feeling frustrated. Engie's survey found that more than a quarter of people believe they aren't paying a fair price for their energy. But in order to get the best deal, consumers first need to understand how their energy use is calculated.
(MORE: How to switch energy supplier)
More clarity needed
Even energy experts admit that understanding the figures on utility bills can be a challenge.
Steve Battlemuch, chairman of not-for-profit energy supplier Robin Hood Energy, believes that companies have a duty to tell their customers exactly what they're being charged for, particularly when prices are prone to change.
"The markets for both gas and electricity are extremely complicated, with prices varying due to things such as weather, national and international events, natural disasters and politics," explains Steve. "But all a customer sees is their prices going up. Being open about these costs and their fluctuation is the most effective method energy companies can take to help their customers understand their energy bills."
First-time homeowner Alex wants to switch energy suppliers, but confusing policies and unexplained price hikes have stopped her in her tracks. "One company I was considering automatically takes more money during winter, even if you haven't used more energy," she explains.
"It's not clear to me how it works and how they can pre-emptively charge for energy. It makes me feel like I would rather have a fixed rate than a variable tariff."
The future of energy bills
The changes introduced by Ofgem in 2014 mean that energy suppliers must give their customers personalised information on the cheapest tariff they offer in bills and annual statements. However, some experts believe more drastic measures are required to help customers manage their energy spend.
"Energy companies could overcome the lack of clarity surrounding bills by allowing their customers to design their own, bespoke bills," suggests Chris Cullen of Echoed Managed Services, an organisation that helps businesses to improve their customer service and billing processes.
"The priority needs to be adaptability. Energy suppliers need to work to ensure that their customers are able to access the billing style that suits their own needs, whether that's a digital method or a paper version, a simple bill that contains headline information or a more detail-oriented statement."
Look After My Bills Newsletter
Get the best money-saving tips, tricks and deals sent straight to your inbox every week. Make sense of your money in partnership with The Money Edit.
Matt is a copywriter for small businesses with big ideas and writes about consumer finance.
-
-
Octopus Energy relaunches energy tracker deal – we explain what you need to know and if it could save you money
If you’re an Octopus Energy customer, you may be able to save on your energy bills with the relaunch of its tracker deal. We look at how it works
By Sue Hayward Published
-
Three energy firms pay £8m in switching compensation - has your provider paid out?
More than 100,000 customers have received compensation after changing providers, but is now a good time to switch energy suppliers?
By Tom Higgins Published
-
Octopus Energy relaunches energy tracker deal – we explain what you need to know and if it could save you money
If you’re an Octopus Energy customer, you may be able to save on your energy bills with the relaunch of its tracker deal. We look at how it works
By Sue Hayward Published
-
Three energy firms pay £8m in switching compensation - has your provider paid out?
More than 100,000 customers have received compensation after changing providers, but is now a good time to switch energy suppliers?
By Tom Higgins Published
-
HMRC tax credit renewal packs: act quickly to avoid losing benefit payments
Households receiving tax credits will be asked to confirm their details to ensure they continue to receive their entitlement. Here’s everything you need to know to make sure you don’t miss out on up to £3,480 a year
By Tom Higgins Published
-
Mobile provider rewards: how to earn up to £700
Your phone could be the key to unlocking hundreds of pounds worth of discounts and freebies that you don’t even know about. We reveal which mobile providers offer the best rewards
By Vaishali Varu Published
-
How much do cooking appliances cost to run?
Energy-saving cooking tips from the Energy Saving Trust
By Katie Binns Published
-
Virgin Media leaves thousands without broadband: are customers entitled to compensation?
Tens of thousands of Virgin Media customers were hit by broadband outages yesterday. We explain your rights if your broadband goes down
By Katie Binns Published
-
Broadband switching service delayed - how it will eventually work and why it’s crucial to switch
A broadband switching service designed to make it easier to change to a cheaper or faster deal has been delayed. We explain how you can still avoid huge increases to your monthly internet bill
By Katie Binns Published
-
Heat pumps: why you can claim a £5,000 government grant for longer
Why you now have more time to apply for a government grant towards getting a heat pump in your home
By Sue Hayward Published