A new Which? investigation has 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, in the style of petrol forecourt displays, the number shot up to nine out of 10.
Most energy suppliers say they have simplified energy tariffs since we first investigated this issue a year ago, so we wanted to see if people now find it easier to compare. But our findings reveal the vast majority are still baffled.
Only eight per cent of the people we asked could identify the cheapest deal out of the six leading suppliers’ standard electricity tariffs, 60% got the answer wrong and 32% said they simply didn’t know.
We then showed a hypothetical choice of simplified electricity tariffs to the same people and 89% were able to spot the cheapest deal. They could also find it four times quicker than for the existing standard electricity tariffs.
Which? wants energy tariffs to be much less complicated – with a simple, consistent unit price – so prices can be easily compared at a glance, like on petrol forecourt displays, allowing people to find the cheapest deals with ease.
Which? executive director, Richard Lloyd, said:
“Many consumers are struggling with ever-increasing energy bills and people tell us it is one of their biggest financial worries. With so few people able to identify the cheapest deal it’s no surprise that the majority are paying over the odds for their gas and electricity.
“Energy prices should be presented in a clear, consistent and simple way so people can spot the cheapest tariff more easily, but our test shows that recent changes made by suppliers have not been enough. If the regulator Ofgem fails to deliver on its plans to simplify the market then the Government must step in to help hard-pressed consumers.”
See if you can spot the cheapest deal by taking our online test.
Notes for editors:
1. In July 2012, Which? surveyed a representative sample of 1,029 UK adults to find out whether they could identify the best deal from six different electricity tariffs from the leading suppliers. We then showed them simplified energy tariffs and asked them which was cheapest.
2. We set the following scenario, set out in the graphic, to see if people could select the cheapest energy tariff. We asked people, if Mr Smith uses 2,100 kWh of electricity a year and pays by fixed monthly direct debit, which is the cheapest deal for him? 8% were able to spot the cheapest deal, 60% got the answer wrong and 32% admitted they didn’t know the answer. (Under this scenario, the correct answer is Npower. All tariff details correct according to the information on the suppliers’ websites on 19 July 2012 for their standard electricity tariff and for a London postcode).
3. We then showed them hypothetical simplified energy tariffs and asked them which was cheapest. 89% got the answer right, 8% got the answer wrong and 3% didn’t know. (Under this scenario, the correct answer is E.ON. Figures shown are for representation only, not actual prices.)
4. According to Ofgem, around three-quarters of energy customers remain on ‘standard’ tariffs even though they’re some of the most expensive on the market.
5. Compare gas and electricity suppliers using Which? Switch, our free and impartial energy price comparison service.