Young people least likely to understand their energy bills

A quarter of 18 to 24-year-olds struggle to understand their energy bills, new research from Octopus Energy and the National Literacy Trust has revealed.

A OnePoll survey of more than 2,500 bill payers looked to explore how well people understood their energy bills and identify ways in which they could be made easier to read.

It found that the number of younger people who do not understand their bills is almost double the percentage across all age groups (14 per cent).

More than 91 per cent of the youngest bill payers could not correctly identify all six common energy bill terms including dual fuel, kWh, tariff, unit rate, standing charge and VAT, compared to just 21 per cent of the over 65s.

Altogether just under half (47 per cent) of all bill payers were able to correctly identify the six terms.

Fewer respondents with the lowest household incomes (£20,000 or less) were able to identify all six terms correctly compared with respondents in higher income bands. Just 38 per cent were able to identify all terms correctly, compared with more than 50 per cent of those with higher household incomes.

Furthermore, the youngest age group are also the most likely to avoid reading their energy bills because of the language used. Seven times as many aged 18 to 24 (22 per cent) compared to 65s and over (3 per cent) said they sometimes do no read their bills for this reason.

Source: National Literacy Trust

Almost half (45 per cent) of this group had to ask for help to explain a word or term they did not understand in the last 12 months, in contrast with just 1 in 50 over 65s.

In total, one fifth of those surveyed said they have sought help understanding their bill in the last year. This more than doubles to over half (51 per cent) of respondents with the lowest levels of confidence in their reading skills.

The report further highlighted how previous studies revealed ways of improving readability and said refinements to structure, word frequency, sentence length and defined terms have been found to improve the readability of insurance documents in the past.

When presented with a number of suggestions about what might help them better understand their energy bills, most respondents said using simpler language in general (42 per cent), as well as clearer definitions of key terms (36 per cent) would help them most in understanding their power bill.

Source: National Literacy Trust

As a result, the National Literacy Trust and Octopus Energy are calling for retailers to use more simplified language in energy bills. Almost two-thirds of bill payers said they agreed that the language of energy bills needed to be more accessible.

In response, Octopus has launched its own bill explainer guide on its website with definitions of the six common terms.

Octopus founder and chief executive Greg Jackson said: “In a world where we are used to hearing that older people can struggle with heating their homes or reading their bills, it’s worrying to see this research which shows that young people are struggling too. They are more likely to find energy bills hard to engage with and even avoid reading them entirely, which could mean they run up large amounts of debt early on in life.”

He added: “Energy companies and regulators have been working hard to protect customers in vulnerable situations, but this research begs the question whether we’ve been overlooking an entire group of people altogether.”

Meanwhile Jonathan Douglas, chief executive of the National Literacy Trust, said: “Literacy plays an essential role in all aspects of life and it is clear the energy sector must change to accommodate the widespread lack of understanding of energy bills.

“Simplifying the language will benefit everyone: almost two thirds of respondents told us they are looking for more accessible language. However, it will especially help the many adults who lack confidence in their reading ability – as half of these people have asked for support deciphering their energy bill in the last year alone.

“If the industry changes, there could be a hugely positive impact on the way people interact with energy: using less and better supporting the environment.”