Several years ago Ofgem announced plans to simplify energy tariffs to help consumers understand them more easily after it was deemed the energy market had become overly confusing.
On 1st April 2014, Ofgem implemented a series of changes through the Retail Market Review (RMR) to simplify how energy tariffs are structured and presented to help consumers understand their energy bills more easily.
In order to achieve this the energy suppliers have made several changes to their billing including; a detailed information break down, more information included on the tariff information label and they must also offer a personal projection for their customers.
Personal Projection is an essential tool Ofgem has introduced to help simplify the energy market to benefit consumers.
The aim of a personal projection is to help energy customers better understand what their energy bills will cost over the coming year and to help distinguish how competitive their current tariff is in the energy market.
In order to calculate a Personal Projection, your energy spend is forecasted out 12-months ahead from the date of your comparison. In doing so, the calculation looks at your existing tariff and then factors in any new costs you might face if/when your tariff expires. For example, if your current tariff expires in 3 months, your calculation will be based on 3 months on your existing tariff + 9 months (the remaining time) on your energy supplier(s) standard/evergreen variable tariff.
With this information the energy company can then work out how much you can be expected to pay over the next year.
Once you’ve worked out your Personal Projection, it will be used to find out if you are on your supplier’s cheapest tariff. If this is not the case, the information will be printed on your bill along with the cheapest alternative.
If you’re not happy with the offer provided by your current energy supplier, then you can take this Personal Projection and use a switching service or compare the prices yourself to see if you can find a cheaper tariff with a new energy provider.
UKPower.co.uk is an free switching service that will offer you accurate information by searching the market to make sure you are on the best energy tariff for you.