Beware of regional pricing

Customers are falling foul of an added tax on their electricity bills, as some companies still impose a "local loyalty tax," according to research conducted by one independent financial advisor.

uSwitch.com found that electricity companies are still cashing in on their old regional status and charging customers within their "home" regions more than customers in other areas.

It was discovered that electricity can be as much as 16 per cent more expensive than the cheapest like-for-like competitor for these customers and that around £446 million is made by firms that still require this added fee.

npower was named as one of the worst culprits, charging customers in its home regions up to £54 pounds a year more than those in other areas - this represents a 14 per cent tax.

"Tactical regional pricing is a tax on loyalty," said Ann Robinson, uSwitch.com director of consumer policy.

She explained: "At the moment tactical regional pricing works against consumers and in favour of electricity suppliers because around half of households are still with their original local supplier."