We found only one in 10 people could identify the cheapest deal when presented with a range of standard energy tariffs. When shown the tariffs in a simpler form the number shot up to nine out of 10.
Imagine pulling up to a petrol station and instead of seeing that the cost of your petrol is going to be around 142p per litre, you’re presented with a baffling array of figures that are all displayed and calculated differently.
You could have a fixed charge and then add the price per litre on top, or you could have different levels of price per litre determined by how much you fill up. Once you’ve decided this, you then need to work out if you’d be better off on a ‘standard’ deal, or if fixed or variable deals are the way to go. Think it’s a good idea? I thought not. Just imagine the queues!
Gas and electricity pricing
So why do we have this complicated, confusing system for our gas and electricity? The latest investigation from Which? shows that only 8% of people could work out the cheapest tariff when presented with six energy deals. The energy suppliers have each adapted their tariff and pricing structures for their own deals so what we’ve been left with is a market that’s now so complicated it’s nearly impossible to find the cheapest deal.
So, it’s hardly surprising that most people don’t even bother trying to find out the best deal for them, even though some could save hundreds of pounds each year.
We think that consumers have the right to simple, easy-to-compare gas and electricity prices. Why can’t it be simpler? If it was more like petrol pricing, and we had one unit rate we could easily compare all gas and electricity deals at a glance.
Price rises bump up bills
With headlines warning us of higher energy bills, and British Gas and Npower announcing price rises this week, it’s even more urgent that we can work out what the cheapest energy deal is.
Ofgem, the energy regulator, has spent two years reviewing tariffs to try to help you switch to get a better deal. It has promised to be bold and force energy suppliers to cut down on the unnecessary complexity. The question is, will it make the ‘bold’, but necessary, reforms or will it simply cave in under the pressure from industry?
If we don’t get the results we’re looking for, we’ll be demanding that the government steps in to simplify the market once and for all.