Author: Nick Little, Principal Financial Adviser at Professional Private Wealth
Are you paying the Loyalty Tax?
Nick Little - June 26, 2026
Could your loyalty be costing you money?
Many Australians unknowingly pay a “loyalty tax” on insurance, banking, utilities, phone plans and other ongoing expenses.
Find out where it hides and how a simple review could save you thousands.
Loyalty is generally seen as a positive trait. We stay with businesses we trust, maintain relationships that have served us well, and often prefer the comfort of familiarity over the hassle of change.
Unfortunately, when it comes to many household expenses, loyalty can come at a price.
This hidden cost is often referred to as the “loyalty tax” – the tendency for long-standing customers to pay more than new customers for essentially the same product or service.
For retirees and those approaching retirement, where every dollar saved can help stretch retirement income further, reviewing these costs can be one of the easiest ways to improve cash flow without changing your lifestyle.
Why being a loyal customer could be costing you thousands
Insurance Policies
Home, contents and car insurance premiums often increase over time. Many people simply renew each year without comparing alternatives, while insurers frequently offer discounts to attract new customers.
Banking Products
Older savings accounts and term deposits may not offer competitive rates. Be mindful of bonus interest conditions, as failing to meet them can significantly reduce your return.
Energy Providers
Electricity and gas plans can become uncompetitive over time. A quick comparison may reveal substantial savings.
Victorian residents can compare plans at: compare.energy.vic.gov.au
Telecommunications & Subscription Services
Many households pay for phone plans, streaming services and memberships that no longer suit their needs or aren’t being fully used.
Small Savings Add Up
While investment returns often receive the most attention, reducing unnecessary expenses can provide an immediate, risk-free benefit.
Saving $1,500 per year on household costs is the equivalent of generating an extra $1,500 of after-tax income and those savings continue year after year.
In retirement, controlling expenses is often just as important as growing assets.
A Simple Annual Financial Health Check
Consider setting aside one afternoon each year to review:
✓ Insurance policies
✓ Electricity and gas providers
✓ Mobile and internet plans
✓ Bank accounts and term deposits
✓ Subscription services
✓ Credit cards and annual fees
Ask yourself: “If I were choosing today, would I still select this provider?” If the answer is no, it may be time to explore alternatives.
Nick’s Take
Businesses value loyal customers, but loyalty should work both ways.
Regularly reviewing your ongoing expenses doesn’t mean constantly chasing the cheapest deal. It means ensuring you’re receiving fair value for the services you use.
A few phone calls and some simple comparisons could potentially save hundreds or even thousands of dollars each year.
And in retirement, that’s money that can be better spent enjoying life, supporting family, or helping your savings last longer.
Not sure where to start or whether your current providers still stack up? A quick chat can help you spot where you might be overpaying and what’s worth reviewing. Get in touch with Professional Private Wealth to book a conversation on 0408 702 056 or click below.
IMPORTANT INFORMATION
The information provided in this communication is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Before acting on any information in this communication you should consider the appropriateness of the information having regard to your objectives, financial situation and needs.
This communication may contain certain ‘forward looking’ statements. Forward looking statements, opinions and estimates provided are based on assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends, which are based on interpretations of current market conditions. Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. There can be no assurance that actual outcomes will not differ materially from these statements.