Household bills · 2 min read

What is a loyalty tax and how do you dodge it?

Staying put feels safe. But providers often save their best prices for new customers. Here's what the loyalty tax is and how to dodge it.

By Agent Bill team · 3 November 2026

You've been with the same provider for years. You pay on time. You never complain. And for your trouble, you might be paying more than someone who signed up last week.

That's the loyalty tax.

What it is

Providers often keep their sharpest prices for new customers. Older plans quietly get dearer, or just don't get the newer, cheaper rates. Nobody rings to tell you.

What it costs

Finder estimates Aussies paid $6.7 billion in loyalty tax across internet, mobile and energy.
According to the ACCC, households on the same power plan for three or more years pay on average $221 a year more than customers on new plans.
A Finder survey found 64% of Australians hadn't switched a single household bill in the past 12 months.

Why we keep paying it

Comparing is a pain. Energy Consumers Australia found 31% of people thought it was too hard to compare offers and the savings wouldn't be significant (cited by the ACCC). Fair enough. Life's busy.

How to dodge it

Know your plan. Find the plan name and start date on your bill. Here's how to read your power bill.
Compare the whole cost. Look at the yearly total, including supply charges, fees and conditions. Not just the headline discount.
Ask your current provider first. The ACCC found households could save an average of $291 just by moving to their retailer's best offer. Here's what a retention offer is, and scripts to ask for one.
Be willing to move. If they won't budge, switching is usually simpler than you think.
Set a reminder. Check again every year, before your renewal.