Our latest investigation reveals that while Ofgem’s new rules for standardised energy tariffs are a step in the right direction, most people still find them confusing.
Most of us know that understanding your energy tariff is the key to comparing prices. And you probably wouldn’t make any other purchases worth well over £1,000 a year without first checking if you could get a better deal.
So surely it’s good news that energy regulator Ofgem has this year brought in new rules on how energy tariffs are structured? Not as much as you might think, as we found when we put the new energy tariff rules to the test.
Tariffs still confusing
In our most recent experiment, we challenged 505 people to spot the cheapest deal using the standard tariffs of the big six energy suppliers (British Gas, EDF, E.ON, Npower, Scottish Power and SSE).
We found that only a third of people picked the cheapest deal when tariffs were presented in line with Ofgem’s new rules, where tariffs are made up of a unit rate and standing charge.
Of the rest, three in ten picked the wrong tariff and a third either didn’t think it was possible to calculate or didn’t know how to.
Fix the Big Six
Now the results of our latest investigation are better than when we ran a similar test in 2012 on the old-style energy tariffs, when just 8% of people could pick the cheapest deal. But clearly it’s still not good enough that the majority of people failed.
Previously, energy tariffs were a bit of a free-for-all, with some made up of a standing charge and unit rate, others just of a unit rate and others of two tiers depending on how much energy was used. There was also a variety of discounts and rewards, expressed sometimes in pounds and other times in percentages, which added to the confusion.
So while the new rules have helped, our results show efforts to simplify tariffs have simply not gone far enough.
That’s why we have launched our Fix the Big Six campaign, calling on the Government, Ofgem, competition authorities and the energy companies to drive forward radical reforms to fix the broken energy market, including simpler tariffs.
We want to see an energy market you can trust, where you have the power to spot the best deal using simple, easy-to-compare pricing.
So what do you think about how energy tariffs are presented? How could they work better for you to easily compare energy deals?
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