Personal Projection Explained

Since 2014 the energy regulator Ofgem has required all energy sent to domestic consumers to display personal projections. The personal projection is an estimate of how much the household will spend on energy over the next 12 months, based on their current tariff and supplier and consumption history.

 

A personal projection shows you how much you’ll pay for energy over the next year, should you stick with your tariff and provider, and can also be used to assess how competitive your current deal is. Compare your personal projections for the next year to offers from other suppliers—generally presented in annual costs, based on your consumption—and see if you’re really getting the best deal.

The personal projection is a tool introduced by Ofgem to keep customers aware of their annual energy costs, to make comparison of tariffs easier, and to encourage consumers to seek out better deals.

 

Your personal projection is an estimate of your cumulative energy costs—or gas or electricity costs, if you buy them separately—for the upcoming 12 months, based on your tariff and supplier and extrapolated from your past use.

 

Ofgem requires that energy suppliers print your personal projection on every energy bill you receive. The requirement was introduced in the spring of 2014, after the regulator’s Retail Market Review discovered that the energy market was complex and that many customers were disengaged and baffled by what they were paying and by their energy bills. The same regulations also require bills to include a tariff information label and a more transparent breakdown of your costs.

To calculate your personal projection, your energy supplier forecasts your energy spending over the next 12 months, from the date of the bill. They base your projected energy consumption on your historic energy use, with consumption rising in the winter and falling in the spring. They multiply your consumption by the unit rate you pay for energy (kWhs), factoring in standing charges and any discounts associated with your tariff (such as a discount for signing up for a dual fuel tariff or paying by direct debit) as well as any scheduled price hikes or reductions and predicted price fluctuations.

 

If you’ve locked in energy prices for the upcoming year or more with a fixed rate tariff, your calculation will be straightforward. The rates you’ll pay for energy will remain the same over the 12 months. 

 

If your fixed rate tariff expires in the upcoming months, the personal projection calculation assumes you won’t take action at that time and will be rolled over onto your supplier’s standard variable tariff. Your personal projection will therefore account for the months you spend on the fixed rate tariff and those you spend on the standard variable rate tariff. That means your personal projection for the upcoming 12 months may change between bills.

Your personal projection is a way to see, at a glance, how much you’ll pay for energy over the next year. It also gives you a figure which can be compared to the offers you see on energy price comparison sites. Price comparison sites will ask you for your annual energy consumption and give you offers which themselves are like personal projections—forecasts of what you’d spend on energy over the upcoming year if you chose that tariff.

 

You’ll also see offers for better deals, from your supplier, when reading your energy bill itself. That’s another requirement Ofgem imposed on suppliers, along with the personal projection. Your supplier will work out which of their tariffs would be the cheapest option for you, using your personal projection. You may already be on the tariff best suited to you, but if not—especially if you’ve been rolled onto your supplier's standard variable tariff—you could consider moving to the one listed. But remember that suppliers are only required to show you their own tariffs and you’ll likely find a better deal by taking to the internet and surveying the entire energy market.