Plans dropped to charge different electricity prices based on where you live

The government has scrapped a proposal that would have seen people across the UK paying different amounts for their electricity depending on where they live.

Under the ‘zonal pricing’ plan, regions like the south-east of England - where demand is high and local generation is limited - could have faced significantly higher electricity bills than areas such as Scotland, which produces a surplus of renewable energy.

But following strong industry pushback and public concern, the government has now confirmed it will stick with a single national pricing system for electricity.

Why was zonal pricing considered?

Zonal pricing was being explored as a way to make the energy market more efficient, encouraging large electricity users (like factories) to relocate to areas with more green energy generation, such as Scotland.

Supporters, including the boss of Octopus Energy, argued it would help drive down long-term costs and speed up the transition to clean power.

However, critics, including major renewable energy providers like SSE, RWE and Scottish Power, warned it would create price inequality, discourage investment and add complexity to the energy system.

In the end, the government decided the risks outweighed the potential benefits.

How to cut your energy costs

Although dropping the plans means you shouldn’t see the cost of your electricity shoot up simply based on your postcode. That said, energy bills are already a major burden for many. So, what can you do if you're feeling the pressure?

If your energy bill is a strain, here are some ways you might be able to reduce your costs or get support:

Check if you're eligible for help with bills

You may qualify for government support, including:

• warm home discount – worth £150 off your electricity bill
• cold weather payments – £25 for every 7 days of freezing weather (if you're on certain benefits)
• winter fuel payment – up to £600 for pensioner households

Check your eligibility.

Paying off energy debt? Talk to your supplier

If you’ve fallen behind on your energy payments, don’t ignore it. Energy companies are required to help customers in debt by:

• setting up affordable repayment plans
• offering payment breaks or reductions in some cases
• helping you access grants or other forms of support

If you're on a prepayment meter, you may also be eligible for emergency credit if you run out of gas or electricity.

Make sure you’re on the cheapest tariff

While switching energy suppliers isn’t as easy as it used to be, some deals are starting to return to the market, especially fixed tariffs that can help you avoid price hikes.

Use a comparison site or speak to your supplier about whether you’re on their cheapest available rate.

Cut energy use with small changes

Energy-saving tips that make a difference:

• Turn down your thermostat by 1°C – could save around £100 a year.
• Switch to energy-efficient LED bulbs.
• Avoid leaving appliances on standby.
• Only boil what you need in the kettle.
• Use draught excluders and radiator reflector panels to improve insulation.

Even small actions can add up to big savings over time.

Need advice?

If you're struggling with energy debt or rising living costs, help is available.

We offer confidential advice on budgeting, tackling debt and finding out what benefits or support you're entitled to.