Australian households are set to receive a $300 energy rebate from the government as part of efforts to alleviate cost-of-living challenges. However, many may not be aware that there is a straightforward way to potentially double their savings.
A significant issue is the phenomenon of the “energy loyalty tax,” where Australians collectively spend over $4 billion annually by not actively comparing and switching energy providers.
According to a recent report by the Australian Competition and Consumer Commission (ACCC), households that have not changed their electricity plans in over a year are paying an average of $238 more each year than those on newer offers. Furthermore, those on plans that are two or more years old may be paying around $317 extra annually.
Taylor Blackburn, a personal finance expert from Finder, noted that many households have been facing substantial energy price increases recently. Although government subsidies provide some relief, they may create a misleading perception of actual costs. Blackburn mentioned a personal experience where a slight increase in rates would have led to an additional $300 annual expense.
Finder’s research reveals considerable disparities in energy pricing, estimating a difference of $500 to $700 per year between the most affordable and the most expensive plans. Despite these potential savings, 85% of individuals with energy plans do not frequently switch providers.
Many remain with their current providers because they are satisfied with the services, perceive switching as cumbersome, or are uncertain about whether alternative plans offer better rates.
To encourage households to explore better options, Blackburn urges Australians to compare different energy plans to identify potentially better deals. He suggests reviewing recent electricity bills to evaluate consumption patterns and considering how lifestyle factors affect energy use.
When comparing plans, key factors to examine include usage charges, daily supply costs, contract terms, and available discounts. It’s worth noting that the most attractive offers typically go to new customers; if your current provider is unable to match competitive rates, it may be time to search for a better deal elsewhere.
Homeowners should also be vigilant when receiving electricity bills, as companies are required to inform customers every three to four months regarding the availability of cheaper plans.
Government comparison websites like Energy Made Easy and Victorian Energy Compare can be useful tools for analyzing electricity rates. Additionally, contacting your existing retailer to negotiate for a better deal can also yield positive results.
By taking these steps, households can maximize their energy rebate benefits and achieve significant savings.