The Lazy Tax: Why Even People Who Switch Are Still Overpaying

Here's something that might surprise you: switching electricity retailers doesn't actually fix the problem.

Most people who feel uneasy about their power bill assume the issue is inertia — they've been too lazy to switch, and if they just got around to it, they'd save a meaningful chunk of money. The research tells a more uncomfortable story. The typical Australian household that hasn't switched does leave about $281 a year on the table, according to a 2019 analysis of 48,088 Victorian electricity bills by Bruce Mountain at the Victoria Energy Policy Centre. That's roughly 20% of the average annual bill — real money.

But here's the twist: households that did switch only recovered about $45 of that $281. The other $236 stayed on the table.

Figures from VEPC 2019 Victorian research — your situation may differ. The $281 figure represents a typical Victorian household as of 2018-19; bill sizes and savings potential vary by state, usage profile, and current tariff.

Switching Is Not Enough — So What's Going On?

Mountain's research pointed the finger at "discounts that are not as they seem and poor advice from price comparison service providers." Which is a polite way of saying: the comparison sites people use to switch are part of the problem.

Think about the economics. The major comparison sites — Compare the Market, iSelect, EnergyWatch, and others — are paid by retailers to send customers their way. That's the commission model: a retailer pays a fee when a customer switches to them through the comparison site. Which plans show up on a commission-funded site? The plans from retailers who are paying for referrals. Not necessarily the cheapest plans. Not necessarily the best match for your usage profile.

The result: you do the right thing, you overcome the friction of switching, you trust the comparison site to point you somewhere better — and you still end up on a plan that leaves most of the saving uncaptured.

The ACCC Cases

This isn't speculation. The Australian Competition and Consumer Commission has pursued comparison sites explicitly for this behaviour.

In 2020, iSelect was fined $8.5 million after the Federal Court found it had shown customers a restricted panel of electricity plans — limited to retailers who had commercial arrangements with iSelect. Around 38% of users could have found a cheaper plan if they'd seen the full market. The court found iSelect had made misleading representations about what it was comparing.

EnergyWatch was penalised on similar themes. The ACCC's view has been consistent: a comparison service that only shows plans from retailers paying it fees is not giving consumers accurate, whole-of-market comparisons — and saying otherwise is misleading.

These cases aren't ancient history. The ACCC and CHOICE have an ongoing investigation into "savings" and "best offer" messaging in the comparison category right now.

What a Conflicted Comparator Actually Costs You

The $236 unrecovered gap isn't just an abstract research finding. It compounds. If you're overpaying by $236 a year, that's $2,360 over a decade on the same plan. And if the comparison site you use to switch only shows you plans from its panel, you might switch and still leave $200 of that on the table — just with a different retailer.

The comparison layer is supposed to solve the information problem: you shouldn't have to spend hours researching every plan in the market. But if the comparison layer itself is filtering plans based on who's paying it, it's not solving the problem. It's obscuring it.

What the Solution Looks Like

The answer isn't to give up on comparing. It's to compare using a service that isn't paid by retailers.

NeverPayMore is built on one structural principle: we're paid by subscribers, never by retailers. We charge a flat annual subscription fee — $49 a year at launch — and we take no commissions, no referral fees, and no payments of any kind from energy companies. That means the plan we recommend is the plan that's actually cheapest for your usage. Not the plan that pays us the most.

We compare against the full market using the AER's Energy Product Reference Data — the same register the government uses. Every recommendation comes with a methodology you can read, a source you can verify, and an "estimated" label, because we're working from publicly available data and your individual situation will vary.

This isn't a particularly radical idea. It's the same reason you might pay for independent financial advice rather than relying on the bank that's also selling you the product. Independence costs something — and in this case, that something is $49 a year, which for most households is covered by the first month of the saving.

Check Your Lazy Tax

We've built a quick lazy-tax check that estimates what the loyalty tax looks like for a household like yours, based on your postcode, your usage, and whether you've switched recently. It takes about 90 seconds.

It's an estimate — not a personalised plan recommendation, and not a guarantee. But it'll give you a number to put to the question you've probably been wondering about.

Run your lazy-tax check →

---

NeverPayMore is a pre-launch beta. Savings figures are estimates based on publicly available data, not personal financial advice. All savings figures referenced in this article are drawn from Mountain & Rizio, VEPC Working Paper 1909, September 2019 — Victorian data, 2018-19 bill year. Your situation will vary.