Forget social standing, it's postcodes that tell big business who we are

Britain is a nation defined by its postcodes.

Big business is increasingly using address details to label people according to their jobs, family make-up, spending, holiday preferences - even life expectancy.

New research suggests specialist firms can produce 'frighteningly accurate' profiles using a vast database built up from loyalty cards, census details, credit card spending and loan applications.

Crime statistics, house prices, school results, insurance claims and even hospital admissions are also fed into the equation.

One of the main firms involved, financial services company Experian, has identified 61 specific types of people, or British tribes, using a system it calls MOSAIC.

The company claims it can produce an accurate profile of a person based on their postcode, which is likely to cover as few as 14 houses in a street.

This will show whether we drive a Lada or a Lamborghini, take package holidays to the Med or splash out on exotic breaks, or prefer bingo to a Beethoven concert.

The industry's claims have been verified by sociologist Professor Roger Burrows, who told the Festival of Science this week that these profiles are 'frighteningly accurate'.

He cross-checked the Experian computer profiles against the reality on the street in the small East Yorkshire town of Howden, together with a street in Hoxton, East London.

The professor found that the postcode profiles matched near-perfectly with the properties and lifestyles he observed.

"In Howden, all the houses were similar, but you could almost feel the crack in the street where the postcode changed," he said.

"Cars in the drive started to change, and the wooden windows changed to UPVC."

Companies can buy access to the MOSAIC database and similar systems, such as ACORN, to decide where to target the marketing of goods and services.

Supermarkets use the information to find the best location to site a new store, while insurance companies can use life expectancy details or claims information to decide how to price their policies.

Political parties have bought access to the data in order to target mailshots to drum up support.

But Experian and its rivals deny there is anything sinister in this system of classifying the nation.

A spokesman said: "People have got the wrong idea that this is all about helping companies decide whom they will send junk mail to.

"Nothing could be further from the truth.

"It is increasingly used as a tool by government and public bodies to target services to where they are needed."

The technology allows the health service to plot which types, or tribe, of people are most likely to suffer from certain diseases, such as obesity-related diabetes.

In theory, it can then target resources and health information to the people who are most in need.

Similarly, the fire service has used the data to see what sort of people have made fire insurance claims in the past and so identify similar people who might do so in the future.

It then targets fire prevention advice.

Cynics would point out that insurance companies will also use such information to push up premiums.

The profiles are said to be a factual assessment, but many are not complimentary and people will argue with the conclusions.

Whatever, they give a fascinating insight into how the postcode - originally designed to speed up postal deliveries - has become the new arbiter of social class.