Energy providers fail to deliver

Published by Nathalie Bonney on 16 February 2011.
Last updated on 16 February 2011

lightbulb on post it note

Households aren't receiving annual energy statements, despite Ofgem's ruling that all energy providers must send customers an annual statement by 1 December 2010.

Almost 15 million households, or 56%, have either not received an annual statement from their energy supplier or have failed to recognise that they have had one, according to comparison website uSwitch.

Of those that received a statement, only 36% say that it was clearly labeled. The energy watchdog introduced the statements to help customers more easily compare energy prices, yet only 20% of recipients claim to have used the statements to do so.

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Critics have also attacked the statements for not being sufficiently clear. The Plain English Campaign branded them as "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," says Marie Clair, spokesperson for the Plain English campaign.

She adds that the most sensible way of addressing this issue is to use the same language and format for all suppliers. "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."

If used in the correct way, annual statements could be a crucial tool to help households fight rising energy bills. Those who regularly switched to the cheapest online plan in the last five years paid £4,171 for their energy, according to uSwitch figures, compared to the average standard plan customer who paid out a more sizeable £5,253 over the same period.

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Ann Robinson, director of consumer policy at says that the annual statements, despite being a linchpin of Ofgem's drive to get the competitive energy market working properly, are not coming up to scratch. "As far as consumers are concerned, annual statements as they currently stand are not fit for purpose."

"These statements should serve as an annual reminder to households to make sure that they are paying the lowest price for their gas and electricity. 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." 

Ofgem is due to publish findings of its review into the whole market next month. Chris Lock, spokesperson for the watchdog says: "This is in response to rising energy prices but will also be looking at how effective the new rules that Ofgem introduced are, including the individual annual statements."


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