Mind-boggling financial terms are confounding consumers

Befuddled man
Try as he might, Barry couldn't quite get his head around the concept of inclusive allowance
"it’s important that you take the time to understand them because collectively they provide essential information to help you manage your finances" Claire Peate, Gocompare.com
  • | by Kristian Dando

Do you know your chargeback from your vatable charges? Do you think that a volume correction factor is an in-built safety feature on your mobile phone? And isn’t calorific value something which supermarkets are now legally required to display on ready meals?

It has to be said, the world of personal finance often doesn’t do the consumer many favours when it comes to making things easy to understand. And new research from Gocompare.com has found that about 10% people don’t understand their various bills at all, while nearly 20% of people would just opt not to read a bill they found confusing.

Gas and electricity bills were found to be the most confusing financial documents to understand, with water a close third.

Claire Peate, Gocompare.com’s customer insight manager, said: “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.”

If you’re left befuddled by bills and jargon, never fear: Gocompare.com has produced a range of super-informative guides to help you get up to speed.