It’s one of those bills we tend to ignore — until the numbers start to hurt. New data reveals millions of Australian households are paying far more for electricity than they should, simply because they haven’t updated their plans.
Households Overpaying on Electricity Plans
According to the Australian Competition and Consumer Commission’s (ACCC) latest Electricity Market Inquiry, around 2.5 million households are overpaying for power — in some cases, by hundreds of dollars each year.
The report found that anyone who has stayed on the same electricity plan for more than three years is paying an average of $221 more annually than customers who’ve switched to newer deals. That loyalty, it turns out, comes at a cost.
The data also showed that while more Australians are moving to their retailer’s best available offer — up to 26.7% of customers compared to 19.3% last year — the vast majority are still missing out on savings.
“Loyalty Penalties” Still Costing Customers
ACCC Commissioner Anna Brakey described these overpayments as a clear example of the “loyalty penalty” — a problem that’s been lingering in the electricity market for years.
“Many households could effectively replicate the value of the recently ended government rebates by changing plans,” Brakey said to The Daily Telegraph, noting that roughly every three months, retailers must clearly display how much a customer could save by switching to their cheapest available plan.
Despite that, many customers never act. A combination of habit, confusion, and automatic direct debits means bills go unpaid attention — and potential savings remain untapped.
“The Savings Are Right in Front of Us”
Compare the Market’s Economic Director, David Koch, said millions of Australians could save money with just a few clicks. “Too often we pay our bills without reading them or even opening them,” he said. “Electricity customers get ‘better offer’ messages in their bills. It only takes a few minutes to check how your retailer stacks up.”
Koch estimated that if all 2.5 million customers on outdated plans switched, the collective savings could be enormous — potentially hundreds of millions of dollars in total.
The report also revealed that 36.5% of customers are paying prices at or above the safety net, while more than half are still on plans over a year old. Those with older deals are paying around 4–5% more on average for both flat-rate and time-of-use tariffs.
Time to Take Back Control
Experts are urging Australians to take five minutes to compare their electricity plans before the next bill hits. With cost-of-living pressures still climbing, even small savings can make a big difference.
As Koch put it bluntly: “This year there are no excuses — everyone with the power to switch should do it. Don’t pay for loyalty.”
