45% of people ‘not qualified’ to understand energy bills

Almost three quarters of consumers (73%) think that a qualification in maths is needed to understand household energy bills, according to new research from uSwitch.com.

Despite the fact that people deal with energy bills regularly, over a third (35%) think that someone would need an A' level in maths at the very least to actually understand them.

And consumers have a point. According to education experts, the complexity and format of the information provided in energy bills make them suited to someone with a higher grade GCSE in maths. Based on current pass rates, this suggests that 45% of people may not be qualified to understand their energy bills.

Chair & Head of Mathematics, Edexcel: The amount of information, lack of explanations and format of the bills make them very difficult to process. The reason for cancelled charges which are negative is also unclear. These things would make them inaccessible for most GCSE candidates unless considerable explanation was given."

Energy bills should be accessible to all, but only 12% of consumers say that they are written in such a way that a child could understand them. Instead, three quarters of people (75%) find them confusing and 57% find it difficult to work out how their energy company has calculated their bill. To get to the bottom of this, uSwitch.com asked examining board, Edexcel, to independently assess energy bills from each of the big six suppliers.

According to the Chair & Head of Mathematics, the mathematics involved - subtraction, multiplication, division and percentages - are straightforward and equivalent to a low-level GSCE which 96.2% of GSCE pupils passed last year. The multiple stages of the calculations make the bills harder, but still within reach of most. The problem is the amount of information, lack of explanation and the format of the bills, which make them far more difficult and therefore more suited to someone with a higher grade GCSE.

Chair & Head of Mathematics: The information related to calculating the bill is surrounded by other information. This leads to the calculation of the bill being spread over several pages, which can make it difficult to link the figures from one page to the next. In addition, the period covered by the bill is often divided into shorter periods with the reasons not always clear. Most bills appear to have two rates - a primary and a secondary with the secondary rate cheaper. Where an explanation of this is given, there is little information provided to check without significant further calculation. The units recorded on the meter readings are not the units used for charging on the bill.

Last year 738,451 GCSE students sat maths. Of these 55.2% gained a higher grade pass at C or above - the equivalent of an old O' level. As GCSE is the compulsory school leavers' exam, and maths is a core subject, this suggests that 55% of the adult population could be expected to understand household energy bills - meaning that 45% would not.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "If households are to start managing their energy usage better they need to be given information that they can read, understand and use in a practical way. The industry needs to re-think how this vital information is packaged up and presented so that consumers can fully understand what their bill is saying to them. You shouldn't need to be an ‘A' grade student to be able to understand your bills. As things currently stand 45% of consumers are in danger of being excluded because of the complex way in which energy bills are written and presented today.

"There is a pressing need for the industry to take action to make energy bills simpler, clearer and easier for people to understand. People want this - 51% would feel more in control of their energy bills and usage, 55% would be able to tell if they were on the right type of energy plan to suit their needs and 45% would trust their supplier more. If the industry tackles this issue once and for all, the market, suppliers and consumers all look set to win."

Richard Wiseman, consumer psychologist, says: "Literacy and numeracy are very different skills. Although the maths involved in energy bills might be straightforward, consumers seem confused about what the numbers actually mean and therefore uncertain if they are correct. As a result, people may feel frustrated by their energy bills, worry that they are overpaying and perhaps even resentful towards their supplier.

"Energy bills should be far more transparent. There are several real incentives for suppliers to change their bills to make them easier for people to understand - customers will feel more in control, may develop a more positive relationship with their supplier and be far more likely to show loyalty in the future."

Energy bills - the consumer verdict:

A child could understand my energy bills - 12%
Need at least an O' level/GCSE in mathematics to understand my energy bills - 38%
Need at least an A' level in mathematics to understand my energy bills - 18%
Only someone with a degree in maths could understand my energy bills - 8% 35%
Even someone with a degree in mathematics would not understand - 9%.