Have you switched energy providers recently? If so, did you use the Tariff Comparison Rate (TCR) to help inform your decision? Do you know what it is and how it’s designed to help you?
The TCR is the regulator’s new price comparison tool designed to make it easier to compare energy prices. It tells people how much a tariff costs per kilowatt hour (kWh) based on medium usage and is intended as a guide to help compare tariffs.
However, tariffs with a low TCR might not be the cheapest deal for people with low or high energy consumption. Only 25% of households are medium users for both gas and electricity, which is why it’s really important suppliers can easily and accurately explain how it works to customers.
As part of our Fair Energy Prices campaign, we carried out some mystery shopping to find out how energy suppliers explain the TCR and found that they are failing to provide customers with the information they need to accurately compare tariffs.
What happened when we called energy providers
We called 13 energy suppliers, six times each, equating to 78 calls in total (lucky us!), asking them to explain the Tariff Comparison Rate. We were given accurate information in only four calls – which works out to just 5% of calls. Eon and Npower were the best suppliers, giving an accurate description of the TCR in two of the six calls they both received.
Our previous research showed only 28% of people got the right answer when asked to identify the cheapest deal from a range of tariffs using the TCR. We also found that when the tariffs were presented in our simple pricing format, the number of people selecting the cheapest tariff shot up to 84%.
Our Fair Energy Prices campaign, is calling for energy suppliers to adopt simple pricing, presented in the style of a petrol forecourt display, so people can more easily compare deals and find the best deal.
We believe that if energy companies can’t even explain how to accurately compare tariffs then their customers stand no chance. We want suppliers to up their game and ensure they can provide consumers with a clear and accurate explanation to help them find the best deal.
Have you ever used the Tariff Comparison Rate to see if you’re getting the best deal? Has an energy provider used the tool to help you or is this the first you’ve heard of the initiative?