It's a reasonable assumption. Loyalty is often rewarded in many industries. But in the energy market, the relationship between loyalty and savings is more complex. If you are searching to compare energy deals vs loyalty tariffs, you are asking an important financial question: Does staying with your current supplier offer better value than switching to a new energy deal? In this comprehensive guide, we will break this down from first principles — defining what loyalty tariffs are, what energy deals typically offer, and how to compare both properly to avoid overpaying.
First Principles: What Is an Energy Tariff?
Before comparing loyalty tariffs and energy deals, we must define what an energy tariff actually is. An energy tariff is the pricing structure that determines how much you pay for electricity and gas. Every tariff includes:
- Unit rate (price per kilowatt-hour, kWh)
- Standing charge (daily fixed fee)
- Contract type (fixed or variable)
- Exit fees (if applicable)
This formula applies whether you are on a loyalty tariff or a newly switched energy deal.
What Is a Loyalty Tariff?
Loyalty Tariff
A loyalty tariff is not always a formally branded product. Instead, it usually refers to:
- The tariff offered to existing customers
- Renewal offers when a fixed contract ends
- Special in-house deals not publicly advertised
- Standard variable tariffs retained by long-term customers
In many cases, when your fixed energy contract ends, your supplier may move you automatically onto a standard variable tariff (SVT), or offer a renewal deal for existing customers. These renewal offers are often described as loyalty incentives. However, the critical question is not what it's called — it's how it's priced.
Energy Deals
When consumers search to compare energy deals, they usually mean:
- Fixed-rate energy tariffs available in the wider market
- Promotional switching offers
- Dual fuel deals
- Online-exclusive tariffs
These are often designed to attract new customers. Energy deals typically lock in rates for 12–24 months, offer competitive pricing, include exit fees, and aim to win market share. Suppliers frequently price new customer offers more aggressively than renewal tariffs.
Why Loyalty ≠ Lower Prices
Energy suppliers operate in a competitive market. To grow, they must attract new customers. This often results in:
Existing customers, particularly those who do not regularly compare energy prices, may be placed on standard variable tariffs or less competitive renewal rates. This is not necessarily malicious — but it reflects market dynamics. Active consumers often access better pricing than passive ones.
Comparing Properly
Calculate Your Current Annual Cost
Using your actual usage data, determine your total annual energy bill under your loyalty tariff.
Obtain Renewal Offer Details
If your fixed contract is ending, ask your supplier for: unit rate, standing charge, contract length, and exit fees. Do not rely on monthly payment estimates alone.
Compare Against Market Energy Deals
Look at: fixed-rate energy deals, total estimated annual cost, standing charges, and exit conditions. The key comparison metric is total annual cost — not brand familiarity.
Fixed Loyalty vs Market Fixed Deals
Sometimes, loyalty renewal offers are competitive. However, they are often priced slightly higher than the supplier's best new-customer deals. Even a small difference in unit rate can produce meaningful annual savings, particularly for high-usage households.
For example: A difference of just 1p per kWh in electricity unit rate across 4,000 kWh per year = £40 annual difference. Combined with gas, savings can add up quickly.
Energy price comparison must always be data-driven.
When Staying Makes Sense
📊 Renewal matches market rates
If your renewal offer is genuinely competitive
⭐ Exceptional service
Customer service quality is worth a small premium
💷 Savings minimal
Switching savings are negligible
🧘 Simplicity valued
You prefer avoiding administrative effort
However, this should be a conscious decision — not a default one.
The Risk of Automatic Renewal
One of the most common causes of overpayment is automatic transition to a standard variable tariff. Standard variable tariffs have no fixed end date, allow price changes, and often cost more over time. Many households remain on SVTs for months or years simply because they did not compare options. Energy loyalty becomes expensive when it is passive.
Is Switching Energy Supplier Safe?
Yes. Switching energy suppliers does not interrupt supply, does not change your physical connection, is regulated and protected, and includes a cooling-off period. The electricity and gas grid remains the same regardless of supplier. The risk lies not in switching — but in failing to compare.
Utility King's Perspective
At Utility King, we do not believe loyalty should be blind. We encourage customers to: review tariffs annually, compare renewal offers with market deals, prioritise total annual cost, and consider both stability and flexibility.
Energy suppliers are businesses. They price according to strategy. The most cost-effective households are those that treat energy as an actively managed expense — not a static utility. If your loyalty tariff is genuinely competitive, staying may be the right move. But you should confirm that with data — not assumption.
Frequently Asked Questions
Not always. Many new customer energy deals are priced more competitively than renewal offers.
You are typically moved onto a standard variable tariff, which may be more expensive.
In some cases, yes. Asking for a competitive renewal rate can be worthwhile.
Yes. Switching is regulated and does not interrupt supply.
At least once per year and always before your fixed contract ends.
That depends on your priorities. Even modest annual savings compound over time.
Unsure if your loyalty tariff is competitive?
Let Utility King help you compare energy deals objectively — ensure your loyalty is financially justified.