Research by consumer champion Which? shows thousands of UK residents pay “excessive” home insurance premiums as a “punishment for loyalty”.

The survey of almost 8000 customers found those with combined building and contents policies owned for longer than a year were paying, on average, 38% more annually than new customers.

For contents cover, continuing customers pay 32% more than new policyholders.

Which? says the disparity increases over time: customers with the same insurer for more than 20 years pay double the amount new customers pay.

It says policies are sold at a discount, and sometimes at a loss, during the first year to attract new business. However, this leads to rises during renewals and “can mean long-standing customers are unfairly penalised”.

It says 69% of respondents had been with their insurer longer than a year. One in six of those aged over 75 had held their cover with the same provider for more than a decade.

One customer was paying £554 ($979.57) a year for home insurance after six years with her provider, but saw the same policy available to new customers for £335 ($592.34).

She cancelled and reapplied to access the new customer discount, saving £219 ($387.23).

“It is unacceptable that long-standing policyholders are taken for granted by insurance providers and hit by these excessive premiums,” Which? Money Editor Harry Rose said.

“Customers who prefer to stay with one provider are at risk of being exploited by these vastly overpriced premiums when little has changed in the service they receive.

“Insurers must make sure existing customers remain a priority and are not sidelined by the push to attract new business.”

Earlier this year the Association of British Insurers and the British Insurance Brokers’ Association announced plans to tackle excessive premium differences between long-standing and new customers, after it acknowledged vulnerable people were at a disadvantage.