'Postcode lottery' decides consumer utility bills
Published On 29 March 2007
The amount of money people have to spend on their utilities, such as electricity and water, is a lottery where winners and losers are decided by postcodes.Several consumer websites have recently made this claim. For example, the website simplyswitch.com has recently been angered by the regional inequalities in the price cuts npower have made.
According to the company itself, these price cuts mean that consumer gas prices will fall by 16 per cent and electricity will become three per cent cheaper for customers in May.
However, smiplyswitch.com says that the cuts are entirely dependent on the postcode in which you live.
According to the site, some consumers will see their electricity bills fall by three per cent, but some will see prices fall by 14 per cent.
"Three per cent is the average electricity cut across the country, but there are huge regional variations," said Karen Darby, founder of the price comparison and switching service.
"npower, like other energy suppliers, is cashing in on its customers' loyalty by only cutting prices significantly in regions where it wants to increase its market share."
This means that customers in the company's host regions - notably Yorkshire and the Midlands - are unlikely to see any significant price reductions.
"Analysis of each of the 14 original electricity areas in the UK has shown that households in a company's host region can pay significantly more for their electricity than those on an identical tariff with the same supplier in other parts of the UK. In some cases, this difference in an annual bill is over £100," Ms Darby added.
And it's not just for electricity and gas where geographical location plays a part in how much your utilities cost - it's true for water suppliers too.
The consumer website uSwitch.com has reported that water bills in the UK are set to increase by an average of seven per cent from April 1st - meaning that consumers will typically have to pay £20 a year more for their water.
Again, however, the amount bills increase is determined by where you live. For example, South West Water has decided to increase their prices by 10 per cent, meaning that their customers will have to pay an annual water and sewage bill of £483.
In contrast, a Thames Water customer will typically pay £208 less.
Unlike with gas and electricity suppliers, customers have no choice about who provides their water, meaning that the price they are charged is entirely at the will of their supplier.
Ann Robinson, the director of consumer policy at uSwitch.com, commented on these increasing utility costs, saying: "The average household in England and Wales is now looking at having to spend, on average, over £100 a month just to provide the essentials of heating, light and water."
