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:
Hardest to understand (%)
Council tax bill
Home insurance renewal
Car insurance renewal
Mobile phone bill
Credit card statement
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:
Percentage of people able to explain (%)
Volume correction factor
AER (annual equivalent rate)
Calorific value (CV)
APR (annual percentage rate)
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/
Notes to editors:
On 3 October 2013, Vision Critical conducted an online survey among 2,001 randomly selected British adults who are Springboard UK panelists. The margin of error—which measures sampling variability—is +/- 2.2%. The results have been statistically weighted according to the most current education, age, gender and regional data to ensure samples representative of the entire adult population of United Kingdom. Discrepancies in or between totals are due to rounding.
Gocompare.com launched in November 2006. It was founded by Hayley Parsons, who has worked her entire career in the insurance broking and aggregator markets. It was the first comparison site to focus on displaying product features rather than just listing prices, and it was this philosophy that led to Gocompare.com becoming the only price comparison site to be invited to join the British Insurance Brokers' Association (BIBA).
Today, Gocompare.com has become one of the most successful comparison sites in the UK, with the equivalent of a quote being carried out every second during 2012. It provides one of the most comprehensive online car insurance comparison services in the UK as well as comparing home insurance, pet insurance, breakdown cover, bike insurance and van insurance.
With Gocompare.com, customers can also compare a wide variety of other products and services, including credit cards, travel insurance and business insurance, plus gas and electricity and other household services.
Gocompare.com is authorised and regulated by the Financial Conduct Authority (FCA).