1 in 3 risk debt by not checking energy bills

Despite a 42% or £381 increase in energy prices last year and consumers struggling with an average household energy bill of £1,293 a year, almost a third of energy customers (30%) have no idea whether they are paying the correct amount for their gas and electricity. This is because they are not checking their bills at all, or are only looking at them cursorily to see how much they have to pay, according to new research from independent price comparison and switching service, uSwitch.com.

The report, based on responses by almost 5,500 energy customers in the UK, reveals that less than a quarter (21%) are making sure their bills are correct by double checking against meter readings and previous energy bills. Those who are not taking these steps risk overpaying or underpaying on their energy, with the latter potentially leading them into debt.

This could cause energy debt to spiral. At the last count there were 6.8 million households in debt to their energy supplier and the average debt was £114 - enough to prevent consumers from being able to switch suppliers.

Of those who do not check their bills, almost two in ten (19%) don't understand them, while over one in four (28%) cannot be bothered. However, over a quarter (26%) simply trust their supplier to get it right.

In the face of high energy prices, consumers are being advised to move to a cheaper energy plan and to cut down on the amount of energy they use. However, the information they are getting, or are able to understand, from their energy bills is not helping them with this. An overwhelming 66% of energy customers say that their energy bills do not help them easily identify how they can cut back on energy usage and 65% say that they do not help them to work out how they could cut the actual unit cost of the energy they use.

More importantly, 60% of customers say that their energy bills do not help them to understand what help their supplier could give them towards making their home more energy efficient. Given suppliers' Carbon Emission Reduction Targets (CERT) and the fact that consumers are paying an extra £19 a year on gas and £18 a year on electricity to provide funding for companies to support energy efficiency measures, this is a concern.

While Ofgem is pressing the industry to simplify billing and to provide annual energy statements to help overcome some of these issues, this will take time to agree and implement across the whole industry. As a result, consumers are highly unlikely to start receiving the information they need in time to reduce this year's heavy winter bills.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "Energy bills are a key link in the communication chain between suppliers and their customers. Unfortunately, for many consumers, this link is broken. As a result, they are not getting the information they urgently need to start bringing the cost of their energy down.

"Ofgem is working with the industry to simplify bills and to ensure that all customers get an annual energy statement. However, this will take time to bear fruit and so will not help consumers reduce this winter's heavy fuel bills. Consumers should help themselves by making sure that they check their bills regularly and provide their supplier with up-to-date meter readings.

"The priority for consumers today is to make sure they are paying the lowest price for their energy and to use less of it. If they are not getting the information they need to help them with this they should contact their supplier or seek independent advice on the energy plans and the energy efficiency help that is out there. With energy prices so high basic steps, such as paying by direct debit, moving to an online plan and becoming more energy efficient, can pay dividends."

For more information visit, uSwitch.com