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Poorest areas hit with highest energy bills

ReenaSewraz
by Lovemoney Staff ReenaSewraz on 23 June 2012  |  Comments 7 comments

Some regions of the UK are suffering disproportionate energy prices because people are sticking with the same supplier.

Poorest areas hit with highest energy bills

An alarming report has revealed that the poorest areas in the UK are being hit with the most expensive energy bills.

The Quarterly Price Survey conducted by Energyhelpline.com, an independent price comparison service, has uncovered that there is a postcode lottery when it comes to what energy customers are charged, with prices differing between some regions by as much as £92 a year.

The findings

The study investigated the cost of energy in 14 regions across the UK.

It found that Merseyside and North Wales are charged the most by energy providers, with a typical annual bill totalling £1,373. Those in the West Midlands face the second highest bills at £1,333 a year, followed by Central and Southern Scotland (£1,329), then the rest of North West England (£1,316) and the South West (£1,316).

The cheapest regions, according to the report, were North Scotland (£1,281), the East Midlands (£1,291), London (£1,293), Southern England (£1,294) and the South East (£1,297).

The results show an unfortunate trend where people in areas with higher unemployment, such as Merseyside and North Wales, are footing the highest bills. Meanwhile those in more affluent areas like the South East pay on average £76 less per year.

The explanation

So what’s the reason for this significant variation of energy prices across the UK?

Sadly it seems to be because the 'Big Six' energy companies are charging whatever they think they can get away with in a given region. And if people don't switch, for whatever reason,  then the prices remain high.

The Which? Big Switch campaign highlighted this problem at the beginning of the year when it encouraged people to sign up and have energy companies bid in a reverse style auction for their custom with the best energy tariff they could muster.

Savings through switching

This research highlights yet again how energy customers could get a better deal by switching services rather than sticking with the same supplier.

A typical customer in Merseyside or North Wales could be making a £370 saving on their gas and electricity bills if they switched onto a deal like the first:utility isave v10 energy tariff, which would bring down the annual spend on energy in these areas from £1,373 to £1,003.

The table below show how other regions could benefit from switching onto this market leading deal as well.

Region

Total average energy bill

Total energy bill if switched to First Utility deal

Switch savings

Central & South Scotland

£1,329

£1,023

£306

Central & South Wales

£1,309

£1,062

£247

East Midlands

£1,291

£1,013

£278

Eastern England

£1,309

£1,029

£280

London

£1,293

£1,059

£234

Merseyside & North Wales

£1,373

£1,003

£370

North Scotland

£1,281

£991

£290

North East England

£1,306

£1,004

£302

North West England

£1,316

£1,004

£312

South East england

£1,297

£1,045

£252

Southern England

£1,294

£1,048

£246

South West England

£1,316

£1,023

£293

Yorkshire

£1,298

£1,030

£268

Source: Energyhelpine.com

If you want to switch but are baffled by the numerous tariffs or unconvinced you could make a saving try our energy comparison tool which gathers every deal available on the market to find you the best value tariff for your home.

More on energy

First Utility and British Gas to provide personalised energy saving tips

Smart meters will spy on us!

Feed-in-tariffs: can you still profit by going green?

Why energy bills have trebled in eight years

Collective switching only one way of getting cheaper energy bills

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Comments (7)

  • suemalling
    Love rating 5
    suemalling said

    I feel the private monopolies of the water companies need a very bright spotlight turned on them. Have recently had a major run-in with Southern Water - they bill us for taking away our waste water, while South East Water supply our water (what a breathtakingly inefficient system!) Disposal of waste water has for years been slightly more than initial supply; fair enough, it probably does cost more to deal with the waste product. However, Southern Water have just raised our payments significantly - if we had not challenged them, we would be paying 5 times as much to take away the waste water as for our supply. We got this slightly reduced, but will still be paying around 4 times more for waste than supply. This seems a particular scam based on the monthly direct debit system - as soon as the massive £21 debt we have allegedly accumulated is cleared, we shall change to 6-monthly billing for actual services rather than the monthly direct debit con - less convenient for all concerned, but hopefully more so for the Southern Water bandits. Bear in mind we can't change water suppliers, they remain monopolies years after privatisation. I really feel Lovemoney should investigate this particular abuse, and monthly direct debit system abuses generally, as energy supplier EDF did exactly the same to us.

    Report on 23 June 2012  |  Love thisLove  0 loves
  • Aitken B
    Love rating 116
    Aitken B said

    The excuse we were fed as to why the Water and Energy supplies were privatised was that it would create competition and thus bring down prices.

    Yes well so much for that theory.

    Of course we have offxxx set up to protect our interests. So much for that theory as well.

    The water industry has been hammered by offwat drasitcally restricting price rises to 6% above inflation. Gosh what a draconian restriction that is. Any business person will soon tell you that holding them down to 6% above inflation price rises would have them whooping all the way to the bank (assuming you could find one to trust that is). We are told that these rises are necessary so the private Utility companies can improve their supply infrastructure. Electricity companies have much the same deal in the "Climate Change" levy (not that it has any hope of affecting climate change one iota).

    Now I know I am just being cynical (perish the thought) but I always assumed that a private profit-making company had to develop its product/service at its expense and then go out and sell it to the consumer.

    It seems I am wrong. It seems, in the cockeyed, Alice in Wonderland world of our privatised utilities, that the customer is the one who is forced by government action to provide the capital to the Utility companies through inflated charges so they can improve their infrastructure so they can reduce their costs and make even more money out of people (us) who have no option but to buy their products.

    What a fantastic business model. Force the customer to provide the capital to develop the business then charge them again for the service they paid to set up in the first place. This is almost as good a business model for the Utility companies as MPs' expenses for MPs. (and if you think that's all changed after the revelations, I for one don't believe it).

    Report on 23 June 2012  |  Love thisLove  0 loves
  • bengilda
    Love rating 78
    bengilda said

    When the public utilities were privatised and there was suddenly a choice of electricity supplier it seemed that the prices charged would drop due to competition. But, in order to give the new entrants to YOUR area, the previous sole supplier in YOUR area was barred from cutting prices in YOUR area as the Civil Servants who planned it decided that was best.

    So true competition was not to be and, after these many years, the restrictions are still in force resulting in many paying over the odds.

    Ofgem will not scrap this now unnecessary regulation as it would result in a reduction of jobs that administer it.

    Report on 23 June 2012  |  Love thisLove  1 love
  • Mike10613
    Love rating 600
    Mike10613 said

    This is outrageous, I had no idea that poor people were having trouble paying their fuel bills. Aren't they allowed to pay as you go with those 'key' things? That should make it easy and affordable. Perhaps we should scrap comprehensive education and GCSE's? We could reintroduce GCE's, perhaps one in managing personal finances. On the curriculum could be items like balance transfer credit cards, changing your energy supplier every year and how to be a buy-to-let parasite...

    We could end up with a nation of condescending financial journalists...

    Report on 24 June 2012  |  Love thisLove  0 loves
  • eLJay
    Love rating 76
    eLJay said

    Those key things charge at a higher rate, so the poor people using them pay even more for their power.

    I'd like the courses on balance transfer credit cards, changing your energy supplier every year and how to be a buy-to-let parasite - those sound very useful!

    Report on 25 June 2012  |  Love thisLove  0 loves
  • Dunsailing
    Love rating 5
    Dunsailing said

    I got so fed up with the continuous increase in gas prices that I decided to no longer use gas. Months ago I payed my final bill outright. I no longer have any use for gas and never will. My electric bill is acceptable - between £ 120 and £165 a quarter. And I do not miss the gas wahtsoever.

    Report on 28 June 2012  |  Love thisLove  0 loves
  • Mark Vickery
    Love rating 5
    Mark Vickery said

    Mike10613 it is correct that customers on low incomes or in rented / council houses can pay by key meters, but the rates are among the highest in the market.

    So not only do they have to pay up front, but they pay over the odds compared to some of the best online tariffs that they are effectively excluded from

    Report on 02 July 2012  |  Love thisLove  0 loves

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