Is energy brand loyalty costing you money?

Households that stick with their current energy plans without reviewing or updating them could be spending an extra $317 annually compared to those who take the time to explore better options.

This insight comes from a recent electricity pricing report published by the Australian Competition and Consumer Commission (ACCC).

While government subsidies at both federal and state levels have helped to lower energy bills across Australia, the ACCC’s annual survey highlighted a significant trend: households willing to shop around and switch energy providers are saving - on average - 17% more than those who remain loyal to their existing provider.

In simple terms, the report suggests that loyalty doesn’t always pay off when it comes to electricity plans. By staying informed and actively comparing offers, families can unlock significant savings and reduce the strain of energy costs on their household budget.

What is loyalty tax?

First off, let’s clear up any confusion: while it’s called a ‘tax’, loyalty tax has nothing to do with the ATO. Instead, it’s a sneaky way companies charge loyal customers more money over time. The good news? You can avoid it.

Many of Australia’s most trusted companies - like those offering energy - often target their long-term customers with this hidden cost. Instead of rewarding loyalty, they quietly raise prices or premiums the longer you stay with them.

In simple terms, these companies attract new customers with great introductory deals. But once your plan renews or a set period passes, the prices often go up and sometimes, the price rise is significant.

How to avoid the loyalty tax on energy

Sticking with the same energy company can be a comfortable and familiar thing to do. You know how the bills are outlined, how you pay for them, and you know what to expect.

According to the ACCC report mentioned earlier, loyal energy customers in Victoria ended up paying around 19% more on their yearly bills. This amounts to an extra $291 when compared to those who switched providers. In NSW, the gap was 15%, or $297, while South Australians faced the biggest dollar difference, paying $334 more on average.

Anna Brakey, a commissioner at the Australian Competition and Consumer Commission (ACCC), encouraged people to reach out to their electricity providers and ask if they could switch to a cheaper plan.

The smartest move you can make is to give your finances a quick check-up.

Start by reviewing your current energy plans both gas and electric. From here, you can see if anything has changed since your initial sign up. Pay extra attention to your energy bills and compare your current rates with the deals advertised online for new customers.

You might find that your provider is offering a better deal for new customers, and if that’s the case, check out a few competitors deals to see if you can get a better offer elsewhere.

You could call your provider and see whether they can offer you something better but if they can’t, you can call our team on 1300 790 106 and ask for help with a switch.

Make this a regular habit. Set a yearly reminder or plan to check your energy usage and bills whenever your contract is about to end. Dedicating just an hour or two can save you a lot of money and it’s definitely worth the effort!

Switch plans with Compare Energy

At Compare Energy, we’re committed to helping our customers to find the best possible deal for their budget. If being with the same provider is costing you money, it makes sense to switch plans and save along the way.

You deserve to be rewarded for your loyalty to a brand, not quietly charged more for it, so why not call us today on 1300 790 106 and see whether you can get a better deal today?