Millions of UK households could be paying hundreds of pounds more each year simply by staying loyal to their energy supplier. Industry data shows that long-term customers, who haven’t switched or reviewed their tariffs in over three years, are often still on default or standard variable rates — the most expensive plans on the market.
According to Ofgem, around 60% of households have not switched supplier since before the energy crisis of 2021–22. Many believe the market has not yet reopened to competition, even though new fixed and discounted dual fuel offers are returning.
Tim Bailey, Head of Partnerships at Free Price Compare, warns that loyalty is now one of the biggest hidden costs in household energy spending:
“Energy loyalty used to be rewarded, but today it’s the opposite. Suppliers know that many customers don’t check alternatives, so they quietly keep them on less competitive rates. With price caps fluctuating every three months, even a few months of inaction can mean overpaying by hundreds of pounds a year.”
How loyalty penalties build up
The energy market was largely frozen during the crisis years, when most suppliers withdrew their fixed-rate products and Ofgem advised households to stay put. But with stability returning, the gap between competitive and default tariffs is widening again.
Analysis from comparison platforms shows that the average household on a capped variable rate could be paying £150 to £250 more annually than those who take time to compare energy deals. For homes that use both gas and electricity, the difference is often even higher when separate suppliers are used for each fuel.
“Dual fuel customers are particularly exposed,” Bailey explains. “Running two accounts with different suppliers doubles your standing charges and eliminates bundle discounts. Consolidating both fuels under one provider can save a typical home around £100 a year, purely through lower admin and billing costs.”
The case for dual fuel tariffs
Dual fuel tariffs allow households to combine both gas and electricity with a single supplier. While once seen as a convenience product, they are now among the most competitive options available.
When households pay two separate standing charges — one for gas and another for electricity — these fixed costs can quickly add up. Ofgem figures suggest the average combined standing charge is now over £350 per year, regardless of usage. With a dual fuel tariff, many suppliers apply only one combined charge or offer bundle discounts that lower both rates.
Bailey adds:
“Many people are surprised to learn that their loyalty penalty isn’t just about price caps or usage — it’s also about structure. Dual fuel tariffs are designed to reduce duplicated costs, and in today’s market, those savings matter more than ever.”
The impact of not switching
The longer a household stays on a legacy tariff, the larger the loyalty penalty becomes. Even with the price cap in place, older plans often sit at the top end of the range, while new deals are introduced just below it to attract active switchers.
Ofgem data shows that households that switched regularly before the energy crisis saved an average of £200 a year compared to those that didn’t. That saving gap is returning as suppliers compete again for new customers.
“People assume that if their supplier is regulated under the cap, it must be the same price everywhere,” Bailey says. “That’s not true. The cap limits what suppliers can charge, but it doesn’t set the actual price. Every supplier still has flexibility within that cap, which is why shopping around is vital.”
Why consumers delay switching
Behavioural experts call it “inertia”: once people believe all tariffs are roughly the same, they stop checking. But that perception is now out of date. Fixed deals have started to return below the capped rate, particularly for direct debit and dual fuel customers.
Bailey explains:
“The biggest barrier is habit. Many people haven’t compared or switched since before 2020. They assume the market’s closed, but it’s open again. The best thing consumers can do is take five minutes to compare energy deals and see what’s available.”
For those unsure where to start, online platforms like Free Price Compare make the process quick and transparent. Customers can see exactly how much they could save by switching, as well as whether a dual fuel option would lower their standing charges.
Looking ahead
Energy prices are expected to remain volatile into early 2026, with Ofgem reviewing the cap quarterly. That means staying loyal to a single supplier is likely to remain costly unless households engage regularly with the market.
Bailey concludes:
“There’s no reward for loyalty in today’s energy market. The people who do best are the ones who check their options every few months. Whether it’s switching supplier, changing tariff type, or consolidating both fuels, staying proactive is what keeps bills under control.”
For millions of UK homes, the message is clear: loyalty costs more. By reviewing contracts, comparing tariffs, and taking advantage of dual fuel discounts, households can start the winter on a stronger footing — and finally pay what’s fair for their energy.
