Consumers face energy postcode lottery

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Owen Humphreys/PA Wire


Many cash-strapped consumers are being forced to pay more for their gas and electricity purely because of where they live, according to uSwitch.com.

The comparison website estimates that this energy price postcode lottery could be costing consumers up to £180 a year.

The uSwitch.com research found that households face a postcode lottery which sees the price they pay for their energy vary by £76 a year on average according to where they live. At its worst, it can see a supplier charging customers in one area up to £180 a year more than its customers living elsewhere - even though they are on the same energy plan, paying by the same method and using the same amount of energy.
The impact of this can be seen most when looking at suppliers' most competitive tariffs - their cheap online energy plans. These consistently offer the cheapest prices in the market, but there is a stark difference in the amount people will pay based on where they live.

This regional pricing policy sees an E.ON Save Online 10 customer living in Brighton paying just £984 a year on average. However, another E.ON customer with the same plan but living in London will be paying £1,164 a year - £180 a year more.

Ann Robinson, Director of Consumer Policy at uSwitch.com, says: "When it comes to the most competitive energy prices in the market consumers face a postcode lottery - the price they get literally does depend on where they live. But while this can catch out the unwary, once people are aware of regional pricing they can very easily turn it to their advantage simply by making sure that they are with the supplier offering the best price in their area.
"Even though all suppliers offer their cheapest prices online, these can vary by as much as £180 in one area. And consumers cannot assume that their local supplier will automatically be cheaper - not one supplier currently offers their most competitive price in their incumbent or 'local' region. This is why it's so important for households to shop around to make sure they are getting a fair deal."
Regional pricing leads to winners and losers, with households in Cardiff paying £1,108 a year on average - making it the most expensive energy region in the country. Households in Liverpool are also losing out paying £1,100 a year on average. The cheapest places for energy are Brighton (£1,060 a year on average), Leeds (£1,067) and Edinburgh (£1,069).
But, even though householders can't help where they live - they can limit the impact of the postcode lottery by ensuring that they are with the cheapest supplier in their area. Even in Cardiff, the most expensive region, there is £106 difference between the cheapest and most expensive supplier. In Brighton there is £149 difference in prices between suppliers, while in Bristol this stretches to £180 a year giving households a real incentive to choose their supplier wisely.

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