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Are you a financial winner or loser in the postcode lottery?

John Fitzsimons
Written By:
John Fitzsimons

There’s more to your postcode than helping your postman deliver his parcels to the right address.

Your postcode can make a significant difference to your finances, with a host of different ‘postcode lotteries’ affecting how much your are likely to pay for everything from home insurance to holiday money.

Home insurance

Research from price comparison site MoneySuperMarket has exposed how people in different areas of the country are subject to wildly different home insurance costs.

It found that those with a postcode beginning SW  – so living in South West London – received quotes of £198.25 per year for combined buildings and contents cover. Indeed, southern postcodes dominate the most expensive quotes, taking all of the top five spots, at a minimum of £172.

Yet homeowners in Durham, with postcodes beginning D, enjoy quotes for the exact same cover at just £98, slightly ahead of Newcastle (£100) and Norwich (£101).

Your postcode is one of a number of factors an insurer looks at when putting together your quote. If your property is in a ‘high risk’ area for flooding or subsidence for example, then your cover will cost more than an identical property somewhere else. Living in an affluent area may also bump up the cost of premiums, as your property and possessions are generally more valuable.

Holiday money

When it comes to sorting out holiday spending money, many of us are content to head to our local Post Office to change up our sterling. However, a study by FairFX a couple of years ago highlighted the drastically different rates holidaymakers get, depending on which branch they head to.

The firm mystery shopped 20 different Post Offices across the UK on the same day, and found that while you could get €670 for £500 in Durham, Bishop Auckland, you’d get a rather underwhelming €620 in Pontypridd in Wales or Ashford in Middlesex.

When it comes to getting the best bang for your buck on holiday money, it’s always a good idea to see what you get from online exchange firms like FairFX, CaxtonFX and Travelex, as well as from small bureau de change in your area too.

Car insurance

The cost of covering your motor can vary sharply depending on where you live, as comparethemarket.com revealed earlier this year. It found that the average cost of car insurance in the capital was a huge £1,460, compared to just £636 in the south west.

Here’s how the different regions broke down:

  • East – £792
  • London – £1,460
  • North West – £1,045
  • Scotland – £648
  • South East – £703
  • North East – £769
  • Wales – £823
  • East Midlands – £807
  • South West – £636
  • West Midlands – £1,171
  • Yorkshire – £877

Part of this is down to the safety of the area you live in. Insurers will take a look at local crime rates and how likely they think your car is to be stolen or vandalised. If they think it is likely, then the cost of your premium will be higher.

It’s not just down to that though. A few years ago research from SmartWitness Incident Cameras flagged up the most expensive postcodes for car insurance, and found the list was dominated by a handful of areas in Birmingham. A big factor in this was that Birmingham was the ‘whiplash capital’ of the UK at the time.


Annuities have fallen out of favour since the introduction of the pension freedoms, but they remain a useful option for many of us when the time comes to give up work. The idea is that you use your pension pot to buy an annuity, which provides you with a regular income for the rest of your life, however long that may be.

Annuities are sold by insurance providers, so they will have their actuaries work out how long you are likely to live – cheery stuff – when putting together a quote for your annuity. The worse your life expectancy, the higher the annuity.

Postcode plays an important part in working out your life expectancy; people in some areas of the UK are more likely to live for longer, basically. As a result, your postcode will play a part in determining your annuity quote.