Annual energy statements slammed as not fit for purpose

Annual energy statements have been slammed as confusing and inconsistent and failing to help customers make better supplier choices. Energy firms had until last December to provide customers with their […]

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By Kelvin Ross

Annual energy statements have been slammed as confusing and inconsistent and failing to help customers make better supplier choices.

Energy firms had until last December to provide customers with their first annual statement, detailing their current plan, yearly consumption and how much they can expect to pay over the next year.

But, according to new research from price comparison service uSwitch.com, only 37% of households claim to have received one.

uSwitch claims that 56% of households, accounting for up to 15 million across the country, have either not received an annual statement from their energy supplier or have failed to recognise that they have had one.

The research highlights potential design or layout flaws that could be making it difficult for energy customers to identify an annual statement and to use the information to make informed choices as Ofgem had intended.

Of those who have received an annual statement, 36% said it was clearly labelled as such, while 39% said that the information it provided was useful.

Less than one in 10 (9%) thought that it contained different information to their regular energy bills, while 14% were not sure what they were supposed to do with the information. Just 20% of recipients used it to help them compare energy prices.

Although annual statements were introduced to promote clarity and transparency, 16% of recipients actually found their annual statement confusing, while 7% found the information that they wanted difficult to find.

When asked how they would improve annual energy statements, consumers wanted information that would help them reduce their bills. Some 64% would like to see a table of all the current tariffs offered by their supplier and the annual cost, 56% would like details of any discounts, such as direct debit discounts, and 46% would like details of any grants available from their supplier and the eligibility criteria.

uSwitch director of consumer policy Ann Robinson said: “Annual statements are a linchpin of Ofgem’s push to get the competitive energy market working properly, but consumers clearly don’t think they are coming up to scratch.

“The vast majority of households will have received an annual statement by now, but only 37% recognise that they have done so. The statements appear to be poorly labelled, difficult to understand and do not stand out from ordinary energy bills. As far as consumers are concerned, annual statements as they currently stand are not fit for purpose.”

She added: “We know that suppliers have worked hard on these statements so we hope that they will now listen to consumer feedback and will work together and with Ofgem on a best practice model. This work is vital if annual statements are to become the consumer-friendly prompt that Ofgem intended.”

Marie Clair of the Plain English Campaign said: “Annual energy statements are confusing and inconsistent. Suppliers have fallen into the trap of using language that is familiar to them, but unclear and often meaningless to the consumer.

“There needs to be consistency in the way suppliers present the information and the language they use. Common sense would suggest that the best bits are taken from all the suppliers and pulled into one standard format adopted by all. This would really benefit consumers and turn annual statements into a meaningful and useful piece of communication.”