The gas and electricity watchdog is claiming customers are being overcharged to the tune of �1bn.

Energywatch Scotland said switching supplier could save families up to two months' gas and electricity money a year.

The 'Switch 'n Save' campaign also claims that two out of three people are being exploited by companies who inherited customers at the time of privatisation.

But industry body the Electricity Association said it is only too happy for customers to exercise choice.

Savings

Energywatch said companies have abused their customers' loyalty by charging more for their electricity than they charge new customers from other parts of the country.

The organisation cites cases from across the country where savings could be made:

• An average family in Dumfries will pay ScottishPower �399 per year for electricity. The same family, living in Carlisle, will pay ScottishPower �301 per year, and if they live in Aberdeen they will pay �371.

• An average family living in Aberdeen will pay Scottish Hydro �400 per year for electricity. The same family, living in Norwich, will pay �309 per year, and if they live in Glasgow they will pay �379.

• An average family on a Dual Fuel (combined gas and electricity) contract with Scottish Gas will pay �817 in Glasgow, �803 in Aberdeen and �775 in the East Midlands. The same family could chose a cheaper option and save �74 in Glasgow, �71 in Aberdeen and �68 in the East Midlands.

"Savings are usually equivalent to the costs of at least one or two months' gas and electricity and that's a significant saving, particularly for low income households," said John Hanlon, chair of Energywatch's Scottish Committee.

Competition among suppliers is high

Operators group the Electricity Association said it encourages all customers to take advantage of the deals on offer.

Chief executive Jenny Kirkpatrick said: "These practices help to raise awareness of the benefits of switching and encourage customers to take a look at what they are paying.

"However, price is not the only factor influencing customer choice.

"We want to see all customers having confidence in the energy market and exercising their real choice - to either take advantage of the alternative deals on offer or stick with their preferred brand."