Energy companies are being overpaid some £5.4bn a year by customers who stay loyal to the same supplier, a new study has found.
A survey for the comparison site energyhelpline has revealed that a third of UK households, who have stuck to the same supplier for at least five years, have spent £18.7bn more than they needed to.
For the 15% of households who have not switched to a cheaper supplier for between five and 10 years, that equates to a loss of between £1,000 and £2,000.
The 7% who have remained loyal for 10 to 15 years have lost between £2,000 and £3,000 and the 10% who have stayed with the same supplier for longer than 15 years have lost at least £3,000 each.
The website warned that remaining loyal to one provider risks an overall rise in energy prices.
“The media talks a lot about broken trust between energy suppliers and customers but in reality there appears to be too much trust. Many customers are staying loyal even while they are getting fleeced – overpaying by around £300 a year and, for the most loyal, £3,000 a decade,” the website’s co-founder Mark Todd said.
“If households continue to stay loyal, providers have no incentive to offer cheaper deals.
“The price of loyalty is truly vast. As energy companies are allowed to charge whatever they like in the UK, it’s important for customers to monitor their bills and not be scared to switch,” he said.
Small Business, Consumers, and Corporate Responsibility Minister Margot James said: “Government action means it’s easier and quicker to switch than ever before.
“The number of suppliers has more than tripled since 2010 and 2.6 million households have already benefited this year alone by switching and saving up to £300 on their bills.”
Some 2,121 UK adults were surveyed for the study between 24-30 March.
When asked why they had not switched suppliers, 53% of respondents cited quality of service as their main reason.
Another 41% said they benefited from their supplier’s reward scheme.
Consistency and familiarity ranked third and fourth as reasons for not switching.
Meanwhile, some 80% of respondents agreed with the statement “if it ain’t broke, don’t fix it”.

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