Annual energy statements are failing to deliver, despite being a linchpin of Ofgem's plans to boost the number of households taking part in the competitive energy market. Energy suppliers had until 1st December 2010 to provide customers with their first annual statement, detailing their current energy plan, yearly consumption and how much they can expect to pay for their energy over the next year. But, according to new research from uSwitch.com, only 37% of households claim to have received one.
Worryingly, 56% of households, potentially 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.
Of those who have received an annual statement, just 36% say that it was clearly labelled as such while just 39% say that the information it provided was useful. Less than one in ten (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 transparency, 16% of recipients actually found their annual statement confusing while 7% found the information that they wanted difficult to find. Annual energy statements are supposed to provide households with clear information and guidance to help them to ensure they are on the best deal, however just 23% of recipients say this information was on their annual statement and was easy to find.
Unsurprisingly, when asked how they would improve annual energy statements, consumers wanted information that would help them reduce their bills. 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.
If designed and used properly, the statements could pave the way for consumers to engage regularly in the market. uSwitch.com data shows that households who regularly switched to the cheapest online plan in the market over the last 5 years paid £4,171 for their energy, while the average standard plan customer shelled out £5,253 during the same period - £1,082 more. With an annual prompt to switch, coupled with the right information to do so, many more households will be able to take advantage of lower prices.
So what information is on an annual energy statement?
The name of your tariff How much energy you've used in the past 12 months in kilowatt hours (unless you've been with your energy supplier for less than 12 months) The estimated cost in pounds per year, if you stay on the same tariff, the tariff stays the same (e.g. no price rises or price cuts) and if you carry on using the same amount of energy The main terms and conditions of your tariff Details of any premiums or discounts that apply to the tariff, or that you may be able to get if you switch to another tariff or payment method with the same supplier (e.g. if you paid by cheque and there was a direct debit discount available, your energy supplier would have to tell you about this on you annual energy statement) A reminder that you can switch your gas and electricity supplier and advice on how you can do so.Have you received your statement yet? Is the information on your energy options clear or confusing? Let us know.