Business

'Postcode lottery' over energy prices

Gas ring

Energy customers in some parts of the country can save nearly £90 more than consumers in other areas when switching to the cheapest deal, research says.

Price comparison website Energyhelpline claimed there was a postcode lottery when considering prices in different regions of Britain.

It found people in Scotland would save the most by moving from quarterly bills paid by cheque to the cheapest tariff.

The cost of delivering energy creates different prices in different regions.

Savings gap

Mark Todd, co-founder of Energyhelpline, said that there was no consistent price for energy in the UK.

The research suggested that, this winter, the typical annual gas and electricity bill when paying quarterly by cheque ranged from £1,227 in Merseyside and North Wales to £1,144 in the East Midlands.

The gap between the cheapest deals available ranged from £813 in South West England to £721 in central and southern Scotland.

On average, there would be a £416 saving by switching from paying an energy bill quarterly to the cheapest deal.

This saving again depends on where the consumer lives, with a potential cut in bills of £456 in Scotland compared with a £369 cut in the South West of England - a gap of £87.

"The statistics prove there is a big problem for consumers struggling with their bills and that there is a very unfair energy postcode lottery in operation," Mr Todd said.

"Another big problem is that there tends to be less switching in poorer areas where consumers often lack confidence to switch."

Safety net

Mr Todd suggested there should be a price cap set by the government "to prevent exploitation of those who never switch".

The regulator, Ofgem, said it was open to the idea of a safety net cheap tariff for vulnerable customers.

The Competition and Markets Authority (CMA) is investigating the energy market and prices paid by customers.

In recent days, four of the major UK energy suppliers have announced cuts to their variable gas tariffs following falls in wholesale prices.

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