The hidden loyalty tax that’s taking your money

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You might think that it’s a boring subject, but when we’re talking about saving money (on average around £250 a year), in this case, it does not pay to be loyal. Switching your loyalties with your energy providers is worth doing. It might feel like a hassle, and one more thing on your never ending to do list, but there is an easier way, which I will be sharing with you today.

What is loyalty tax?

Basically, you get stung with a higher price for staying loyal to a company. How does that work? You get enticed in with a special low rate. Then after a year, it auto renews at a high rate. Gone is the preferential treatment and you are now paying a higher rate than you need to. Most people simply aren’t aware this is happening.

What can we do to stop the loyalty tax?

Well, there are a couple of ways to do this and save money. Firstly, you can set a reminder for one month before the renewal date of all your bills like insurances, energy companies, mobile phone, broadband, mortgage and savings. If you’re not sure, they usually send a reminder letter or email. Don’t just auto renew. You can manually search using comparison websites, or why not take the hassle out of it with auto switching. You can find out more in this article about auto switching from Look After My Bills.

I know from experience it’s so hard when you’re faced with so much choice from providers you’ve never heard of, offering a great deal, but you’ve no idea whether it really is a good deal and if the numbers stack up. It’s like you have to be a mathematician to get through all the figures. We’ve switched a few times, and the last time we did we ended up paying a lump sum which meant we were out of pocket, despite paying a couple of pounds less per month. It put me right off.

I’m going to give auto switching a go so that it’s one less thing floating around in my brain making me stressed. Yes I know it shouldn’t be, but every little helps. I’ll update this post when I’ve had some experience. It’s free to sign up, so it’s a win-win situation. Have you been stung by the loyalty tax? Would you give auto switching a go? Let me know your thoughts in the comments, I love hearing from you.

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