A poll suggests nearly nine in 10 people don’t know what they’re really paying for in their energy bills.
Nearly nine in 10 Brits haven’t got a clue where the cash in their energy bill actually goes, according to a new poll. Research commissioned by Utilita, based on a survey of 5,000 adults, found just 14% could correctly pick out the main chunks of a bill – like operating costs, network charges and policy costs. And when people were asked why bills keep going up, many pointed the finger elsewhere.
Around 39% blamed global events like wars and trade deals, while 21% said inflation. But Utilita claims ‘non-supplier’ costs – things like network charges, government policy costs and household energy debt – now make up almost as much as the energy itself, and they’re still rising.
Respondents believed network costs made up about 12% of their bill, when the research said the true figure is closer to 28%. Supplier profits were also widely overestimated at 13%, despite accounting for less than 3% on average. Wholesale energy costs were underestimated too, with the public guessing 19% compared to a reported 38% in reality.
The survey found lots of households don’t realise they’re paying for other extras too. More than half (56%) didn’t know customers are contributing to domestic energy debt through monthly bills – which Utilita claims totals around £5bn. And 60% were unaware they’re also paying policy costs for government schemes that are added to bills instead of being funded through general taxation.
The research was commissioned by Utilita to raise awareness of its Fairer Energy campaign. CEO Bill Bullen said: “We want the nation to better understand what is pushing up energy bills, and what needs to change to bring down costs for households and create a fairer way to fund the energy transition.”
Utilita claims funding network upgrades through government bonds rather than bill levies could save households at least £108 a year by 2031. It also says ringfencing VAT from energy bills to fund a social discount could save bill payers another £42 – with discounts of up to £450 for those most in need.
Nearly half of respondents said it should be the Government’s job to keep costs under control and help people struggling to pay. And 66% said they don’t believe the Government is transparent enough about the non-energy, non-supplier costs added to bills.
Utilita also claims 63% of the public are unaware that £108 will be added to household energy bills each year by 2030 to help pay for upgrades to Britain’s gas and electricity grids.
Mr Bullen added: “Better understanding of where our energy costs are coming from is just the first step to bringing them down… Simple things like unlocking access to low-carbon technology installations for low-income households and moving the costs of government schemes off bills and into general taxation could help bring down energy costs.”