Energy postcode lottery hits poorest hardest

Updated: 

Pylons in WalesPhil Noble/PA Archive/Press Association Images

A freezing spell is looming, the cheapest energy tariffs are turning to dust, and we can all expect our energy bills to reach horrifying levels over the winter. However, some people will be hit far harder than others - and new research reveals that it's those who are already worst-off who will face the biggest shocks.

So how can this be right, and what can people do?

Most expensive

Energyhelpline.com studied average energy prices across the UK, and revealed some startling differences. Those in the most expensive parts of the country pay an average of £82 more a year than those in the cheapest areas of the country.

The most expensive area emerged as Wales: North Wales coming in at number one and South and Central at number two. A typical annual bill for gas and electricity for families in Wales is a hefty £1,373. They were followed by Southern England at £1,351, North Scotland at £1,350 and the West Midlands, where consumers pay £1,333.

Poverty

It's a bitter blow for customers in Wales. It comes less than a week after the Office for National Statistics revealed that people in Wales were more likely to be in poverty - with 20% of all Welsh households are living in poverty.

Mark Todd, Director of Energyhelpline.com commented: "It's a harsh reality that the areas in the UK with the highest poverty rates are also being hit with the highest energy bills. The areas that most need cheap energy are ending up paying the most. In the run up to Christmas as temperatures drop more families than ever are going to fear that they can't afford to heat their home as energy usage soars and providers are likely to raise prices further."

Why?

Meanwhile, the cheapest regions in the country are on the Eastern side of the country - East Midlands (£1,291), London (£1,293), South East England (£1,296) and Yorkshire (£1,298).

Todd says there may be a clear market-driven reason for this. He explains: "We are now seeing a clearer East – West split on energy bills than we have ever before. Western parts of the UK are generally paying the most and Eastern parts the least. As most gas enters the UK from the East and as many power stations are also located in Yorkshire and Nottinghamshire like Drax the biggest coal-fired power station in the UK then transportation costs could be driving this."

In addition, there is the simple fact that areas where there are large numbers of suppliers competing, and customers available, there is likely to be keener pricing than areas with far fewer suppliers.

What can you do?

The advice for those suffering the most, therefore, is to take action to make sure you are paying as little as possible. With more price rises looming over the next few months, it's worth getting your hands on the cheaper tariffs around now - especially those with an element of guarantee or fixed prices.

Energyhelpline says that first:utility isave v12 and nPower Energy Online are the two cheapest tariffs across the board currently, and switching to them could save substantial sums. If a consumer in Merseyside and North Wales switched from the regional supplier to first:utility isave v12, for example, their energy bill would drop from £1,373 to £1,081. This would be a saving of £292 a year.

SPONSORED FINANCIAL CONTENT