Postcodes: what can they do for us?

A brief history of the humble postcode and its uses.

We all (should) use postcodes. That handy series of letters and numbers coupled with a building name or number is all that is needed to get a letter delivered to our door. Unlike many other postcode systems U.K. postcodes are easy to decode and geographically descriptive. Since the introduction of them over 40 years ago postcodes have been used to describe areas and localities as well as get the mail delivered to the correct letterbox.

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How and why did postcodes come into use?

It all started during the reign of Queen Victoria.

London’s population grew rapidly throughout the 19th century. In 1800 the population was just over 1 million. By 1900 the population was over 6 million. The amount of post carried reflected the rise in population. In 1854 The Postmaster General, Charles Canning, set up a committee to investigate how best to divide London in order to route and distribute mail more efficiently. The problem was not trivial, in 1856 the London population of about 3 million received 100 million items of post.

The project, managed by Sir Rowland Hill, came up with a nearly circular area drawn 12 miles around the central post office near St Paul’s Cathedral. This was divided into 10 districts.

Development of the postcode system since 1857

  • 1857/8: London is divided into 10 districts.
  • East Central (EC), West Central (WC), North (N), North East (NE), East (E),
  • South East (SE), South (S), South West (SW), West (W) and North West (NW).
  • 1864/5: Liverpool split into Northern, Eastern, Southern, and Western districts.
  • 1866: London NE merged into the London E district.
  • 1867/8: Manchester and Salford split into 8 numbered districts.
  • 1868: London S district split between London SE and London SW.
  • 1917: London postal districts split into numbered sub districts to improve efficiency.
  • 1934: Numbered districts introduced into “every provincial town in the United Kingdom large enough to justify it”.
  • Birmingham, Brighton and Hove, Bristol, Edinburgh, Glasgow, Leeds and Bradford, Liverpool, Manchester and Salford, Newcastle upon Tyne, and Sheffield.
  • After 1945: Mail volumes grow. A postcode system was needed to facilitate automated sorting.
  • 1959: Norwich selected to trial a postcode system as they had eight new automated sorting machines.
  • Early 1960’s: The Royal Mail starts a mechanisation program to introduce reliable mechanical sorting. Sorting machines needed the address to be machine readable so a code system was developed from the Norwich trials.
  • 1965: The Postmaster General, Tony Benn MP, announced postal coding would extend to the whole of the UK over the next few years.
  • 1967: New postal codes introduced in Croydon.
  • 1967 - 1970: Rollout of new codes to major centres.
  • Aberdeen, Belfast, Brighton, Bristol, Bromley, Cardiff, Coventry, Manchester, Newcastle upon Tyne, Newport, Reading, Sheffield, Southampton and the Western district of London.
  • 1971: Addresses receive notification of their own postcodes.
  • 1974: Coding is completed. Norwich is the last place to be re-coded.

London's first postal districts

London's first postal districts.

How do postcodes work?


Postcode format “YO30 5QW”

Properly formatted postcodes are written in two halves. The first part has between two and four alphanumeric characters and is the outward code used to get your mail to the right delivery office. The second part follows a space and always has three alphanumeric characters. This is the inward code and it tells the delivery office which round the address is on.

  • Outward code
    • Area: YO: One or two alphanumeric characters subdividing the area.
    • District: 30: One or two alphanumeric characters subdividing the area.
  • Inward code
    • Sector: 5: One numeric character subdividing the district.
    • Unit: QW: Two alpha characters showing a group of buildings, a street, part of a street or a single delivery point.


Click for a bigger image

Postcode coverage


Postcode Unit

There are about 1.7 million unit postcodes. This number changes as around 2750 postcodes are created and 2500 are terminated each month. A unit postcode describes a street or part of street, a single address, a group of properties, a subsection of a property or an individual organisation or department within an organisation.

The allocation of postcodes depends on the amount of mail received. Large users of mail such as the DVLA have different postcodes for different departments. The unit postcodes are used to find about 30 million actual addresses or delivery points, the minimum number of delivery points for a postcode is one, the maximum is 100, and on average the postcode is allocated to 17 delivery points.

Postcodes are combined into sectors. A sector has on average 180 postcodes, the most postcodes in a sector is 390, the least is 1.

The theoretical maximum is 400 because the last two letters are not allowed to be any of C, I, K, M, O, V. That leaves 20 for each letter.




Example of a single postcode unit.

Postcode Sector

The UK has about 9500 postal sectors. Sectors are used in the inbound code to help pick the delivery round.

  • Smallest size CO 4 6, Mile End, Colchester, (less than 0.01 square miles).
  • Largest size IV27 4, Lairg, Sutherland, (1400 square miles).
  • Average size 10 square miles.
  • Smallest population EC3A 4, Aldgate, London (1).
  • Largest population E 12 6, Little Ilford, London (26300).
  • Average population 6800.

Sectors are combined into districts. It takes between 1 and 10 sectors to make a district. On average each district has 3 sectors.

You can read more about postcode sectors and their use as reporting areas in our postcode sector blog.


A complete postcode sector

Postcode District

Approximately 2800 postal districts cover the UK. Districts are used to subdivide postal areas and help route mail to its sorting office. Districts vary in size and population quite considerably.

  • Smallest size is EC2N, East Central London (0.03 square miles).
  • Largest size is IV27, Ullapool (1400 square miles).
  • Average size 33 square miles.
  • Smallest population PA63, Isle of Mull (12).
  • Largest population CR 0, Croydon (159000).
  • Average population 23000.

Districts fall into areas. On average there are 23 districts in an area. The actual number varies between 3 and 77.

Example of a postcode district

Postcode Area

121 areas cover the United Kingdom. Postcode areas vary in size and population. They are usually named as a mnemonic to identify the area or Post Town they cover. E.g. AB: Aberdeen, B: Birmingham and YO: York. Most of the names are quite obvious but there are some mismatches. E.g. Rochester in Kent has an area code of ME for Medway and Lerwick in Shetland has a code of ZE for Zetland (an archaic spelling of Shetland).

London developed a postal code system in the 19th century. Area codes in London are taken from the earlier system. E.g. N: North London, WC: West Central London.

  • Smallest size WC, West Central London (1 square mile).
  • Largest size IV, Inverness (6243 square miles).
  • Average size 776 square miles.
  • Smallest population ZE, Shetland (23000 people).
  • Largest population B, Birmingham (1.9 million people).
  • Average population 533000.
  • Smallest number of districts in an area ZE, Shetland (3).
  • Largest number of districts in an area B, Birmingham (77).
  • Average number of districts in an area 23.

Example of a complete postcode area

Postcodes, not just for mail


Since their inception, postcodes have become more than just a tool to help address mail. As postcodes nest into sectors, districts and areas the postcode has become a handy label to define geographical locations.

The Office for National Statistics produces a directory of all current and terminated UK postcodes matched against the various UK administrative geographies. This reference source ties postcodes to census and other demographic datasets. Postcode-based demographic analysis is easy for commercial users to understand and combines a good level of detail and accuracy with a usable sized dataset.

A map showing output areas (OA) with a postcode sector outlined in blue. Output areas are the building blocks of census and other government provided demographic data.

Output Areas are designed to be socially homogeneous and have around 300 people in them. There are approximately 180000 OA in England and Wales.

While OA represent the most detailed census output available for general release the volume of data is tricky to handle and most business data is geolocated by postcode.

Most businesses have data that is attached to address or postcode information. This could be customer records, or sales receipts for a store where the customers are likely to travel no more than 20 minutes to shop. Having your data attached to postcodes opens up analysis and comparisons using census or other demographic data.

It all starts with a postcode.

Output areas compared to postcode sectors

Output areas compared to postcode sectors

The district YO30 split into constituent sectors displaying the proportion of AB social grade population compared to the UK average. Sector analysis is a good compromise of detail against ease of use. As most businesses are not based wholly on local foot traffic, a sector analysis is good enough.

Area YO split into sectors showing higher AB social grade populations. Using a postcode area gives great context to the analysis but still only has to deal with just over 100 data rows.

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