Utility statements top Britain’s most baffling bills

by Adam on December 23, 2013

Electricity bills top the nation’s list of the most baffling bills with 36% of people saying that they find them hard to understand, closely followed by gas and water bills.  While household utility bills head the list of daunting documents, most people find bank and credit card statements the easiest to read and understand:

 

Document

Hardest to understand (%)

Electricity bill

36

Gas bill

32

Water bill

14

Council tax bill

12

Home insurance renewal

7

Landline/telephone bill

7

Car insurance renewal

5

Mobile phone bill

4

Credit card statement

3

Bank statement

3

 

The survey of 2,000 UK adults, commissioned by Gocompare.com, found that one in ten people don’t understand most of their bills, while 17% tend not to read bills which they find confusing.  Most people (59%) surveyed believe that companies deliberately keep bills unclear.

 

Companies’ use of technical calculations, jargon and abbreviations contribute to baffling bills.  The main reasons given for not understanding bills were:

  • complicated calculations (68%)
  • not understanding the terminology used (36%)
  • too much information (31%)
  • language used is confusing or not plain English (29%)
  • they include too many abbreviations (19%)

 

When asked if they were able to explain the meaning of different terms and abbreviations used on bills and other financial documents most people felt confident in explaining debt (71%), credit (70%), balance brought forward (64%) and tariff (59%).  But found other commonly used terms such as calorific value, compound interest, APR perplexing:

 

Term/abbreviation

Percentage of people able to explain (%)

Volume correction factor

7

Chargeback

17

All risks

20

Indemnity

22

AER (annual equivalent rate)

23

Inclusive allowance

25

Calorific value (CV)

29

Compound interest

30

Kilowatt hours

32

Recommended repairer

37

Vatable charges

37

Economy 7

37

Units

42

Excess

50

APR (annual percentage rate)

51

Credit score

52

Dual fuel

53

Net

53

Standing charge

58

Gross

58

 

Claire Peate, Gocompare.com’s customer insight manager, commented: “Bank and credit card statements, household bills and insurance renewal documents aren’t riveting reading and are often criticised for being overly complicated.  But, it’s important that you take the time to understand them because collectively they provide essential information to help you manage your finances, helping you balance what you earn against what you owe.

 

“As well as giving you an overview of your finances, it’s important to read through these documents to check for overpayments, changes to terms and conditions, errors or omissions.  For example, many people pay energy bills by direct debit and it’s not unusual to overpay during the summer months to offset higher winter bills.  But, often the level of direct debit payment is on the generous side and many people build up a surplus.  These overpayments will be shown on energy bills as credits and customers are entitled to ask for their money back.”

 

To help people make sense of their energy bills and other financial documents, Gocompare.com has produced a range of guides and glossaries which explains commonly terms and abbreviations, as well providing tips to save money: http://www.gocompare.com/sitemap/product-guides/

photo by: reynermedia

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