So what exactly is loyalty tax? Well, it’s not actually a tax but it’s become the common phrase for companies that exploit your loyalty as a customer. Often also referred to as tease and squeeze, it’s where companies entice you with a good deal with the aim of charging you more and more the longer you stay with them.
The hope is that once you’ve signed up, you accept or don’t notice the gradual price increases and don’t shop around regularly. The main offenders are electricity & gas suppliers, TV & broadband providers, insurance companies, mortgage lenders and mobile phone networks to a slightly lesser degree.
Whenever you take out a new deal, set a calendar reminder for a month before the deal ends, to start shopping around. Once you’ve seen what competitors are offering either ask your current supplier for a better deal or simply switch to a new one.