‘Loyalty tax’: Why it pays to switch electricity providers

A new energy provider is vowing to free customers of the ‘loyalty tax’ by automatically switching Aussies to the cheapest provider on the market.

80 per cent of Aussies are overpaying on their power bills. Picture: NewsWire / Nicholas Eagar

Households could save $250 a year on their electricity bills by changing to the cheapest energy provider, an industry expert says.

Australians are paying more than they should for power, with the newly launched Hipages Energy aimed at helping Aussies reduce their electricity bills by auto-switching them on to cheaper plans.

Hipages Group chief executive Roby Sharon-Zipser told NewsWire Australians were often slugged with the loyalty tax.

“Energy providers don’t make it easy for you to find out if you are on the best tariff and the best plans,” Mr Sharon-Zipser said.

80 per cent of Aussies are overpaying on their power bills. Picture: NewsWire / Nicholas Eagar

He said the aim of the Hipages service is to take the complexity out of the energy bill by continuing to monitor household plans against a panel of energy provider options.

“I think the really important thing around the service is the auto switching. Other providers might say, hey, this is a cheaper provider and you have to go to that provider but you physically have to get on the phone and speak to someone to do it.

“Whereas with this service we will do the switching for you.”

The hipages energy set up uses Australian Open Energy initiatives, allowing Australians to access and share their energy data.

“This is available to all Australians allowing them to switch energy providers without being burdened with contracts or lock-in agreements or rates,” Mr Sharon-Zipser said.

By moving households onto the cheapest energy plan on the market, they say they’ll be able to save $250 on their energy bills

The ACCC previously announced at the end of last year more than 80 per cent of households in the National Energy Network could move to a cheaper electricity plan if they shopped around or reached out to their electricity provider.

Energy bills have temporarily fallen due to government rebates. Picture: NewsWire / Nikki Short

According to their research, after factoring in cheaper electricity prices due to state and federal government rebates between August 1 2023 to August 1 2024, households could still save $238 more per year if they avoided the “loyalty tax” with their energy provider.

“If you haven’t changed electricity plans in the past 12 months, chances are you are paying more for your electricity than you need to,” ACCC Commissioner Anna Brakey said at the time.

Hipages’ new service comes after the Australian government extended the energy rebate until the end of 2025.

At a cost of $1.8bn this extension takes a further $150 off power bills, in two quarterly payments of $75.

Mr Sharon-Zipser said customers would get the rebate, but also benefit from ongoing savings through the auto-switching service.

The Hipages website also guarantees customers will save 20 per cent in the first 12 months compared to your previous year’s electricity costs - with any difference to be made up by Hipages in gift cards up to $1000 per property.

“The guarantee that we’re putting together here, just to be clear, as well, is separate from the rebate. So you get that as well,” he said.

Originally published as ‘Loyalty tax’: Why it pays to switch electricity providers