Can you work out your energy bill? You’re cleverer than an accountant then.

27 September 2011

paper workNow that EVERYONE has put up their prices for electricity and gas, being able to work out whether your current energy provider is shafting you has become a necessary, rather than merely desireable skill. However, our good friends over at Which! have done some serious in-depth research into how easy energy bills are to understand. And the conclusion is Not Very.

Which! had a spare five minutes, so asked 36 whole 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. The accountant they asked was not me. I am eminently capable of reading my own bill.

Which!’s concern is that making bills so complex conceals bad deals from customers, with comparisons being made particularly difficult by the ‘tricks’ that energy tariffs typically include.  Amongst the most common tariff tricks are two-tiered tariffs which penalise lower users by charging a much higher rate for the first block of units, and 'discounts' that do not materialise because the customer leaves the provider before a set period.

As a result, Which! has called on Ofgem to introduce one simple standard format for all tariffs, which would have a daily charge covering fixed costs and a unit rate covering the actual energy used.

Richard Lloyd, Which! executive director said "There are straightforward ways that 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."

Separate research from suggests the Government is set for a £197 million VAT windfall from the latest round of energy price rises. They estimate that the recent price rises will increase the annual VAT take from domestic energy will rise to £1.5 billion. Mark Todd, director of has asked the Government to consider cutting the VAT rate on power from 5% to 4% in order to help out hard-pressed households.

"This will give an immediate £13 a year saving on a typical bill and, for once, the Government would actually be reducing people's bills instead of just talking about it," he snarled.

While a reduction of the reduced rate of VAT on fuel would undoubtedly be welcomed, are energy bills really that hard to understand? Is the concept of a two-tiered rate so difficult to grasp? A straw poll round the Bitterwallet office clearly didn’t help, as all the others have OTHER SKILLS rather than the searing intelligence and wit of yours truly, but surely the average Bitterwallet reader can manage? Can’t you?


TOPICS:   Utilities


  • Gunn
    The idea of one flat rate and a daily charge is a good idea and would definitely make it more transparent.
  • Tom
    £13 a year eh. Whoop de fucking doo. The Tory cunts should remove VAT from fuel altogether seeing as it was them who put it on in the first place. Where's the added value in paying for fuel? Nowhere, that's fucking where.
  • captain c.
    So if you want cheap electric, you have to use more; that will help the environment !!!! Some of the suppliers have a two tier system AND a daily charge. As for understanding and working out your bill, even the suppliers cant do it; I had a dispute with NPower over my bill jumping by £300 as soon as I cancelled my direct debit, and even THEY couldnt explain it; just insisted it was correct and I had to pay it. After 8 months of complaints going up the chain of command (and several threats to disconnect my supply),, I reached the "Executive Complaints Department", who offered to cut it by £120 and give me a further goodwill payment of £60.
  • Dan
    Good point Tom, they did put it there. Perhaps they could take it off if the economy hadn't been bent over and shafted by Labour for the past decade or so?
  • Tom
    @Dan. By that logic VAT should be 90% on everything to get us out of the mess Labour helped create.
  • Whisky
    £13 pounds a year, Yeah I can get an 8th of a tank of diesel with that.
  • Show o.
    It is doable, with a spreadsheet. It took me a few bills worth of tweaking, and it is a pain to keep up top date, but I can check my own bills if I have my spreadsheet. Also it is interesting (to me anyway) the price comparison web sites are fairly rubbish at getting an accurate comparison between the utility companies.
  • jsoap
    It would be ok to work out, if they just had a few tarriffs, howver the like of British Gas, bring out new tariffs every month, with variang terms and conditions. They also produce misleading marketin like "minimum 6% discount against British Gas's standard tariff " - read the T&C and it's only 6% off tier2. So you sign up for 15 months with no idea what you will pay for tieri 1 in the future. Its bizarre these clowns have 37 current tarriffs.
  • Loafer1946
    I don't think that the energy companies are very good at sums either. My energy consumption is about £600 per annum from past bills. They estimate next years to be £853 from the same tariff and changed my Direct Debit to £72, I awaiting their explanation.
  • PB
    The thieving fuel companies always overbill you in case you happen to use more, that's the excuse I was given when complaining about payments going up when my consumtion had not changed! It is imp0ssible to compare like for like between companies with thier myriad of tarriffs & strange calculations, there should be a standard way to show tariifs & charges Vs consumtion across all the companies, then at least people can actually comapare the few companies that run this cartel, fuel should be a non profit organisation sold at cost, it is not a luxury!
  • Hospedagem d.
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