How does Utility Warehouse's fixed energy deal stack up?

How does Utility Warehouse's fixed energy deal stack up?

Utility Warehouse currently has a one-year fixed energy deal that, while more expensive than the price cap, is the cheapest 'open-market' (switchable) fix available. Looked at in isolation, it may well be a winner over the next year.

BUT... it's not as simple as just switching your energy, as you have to take other products too. So here we give you the pros and cons of this somewhat controversial provider.

  1. In a nutshell, the current prediction is the energy price cap, which the vast majority of homes in England, Scotland and Wales are now on, is forecast to rise by a further 70% in October 2022. In fact, over the next year it looks like you may pay about 96% more on average than the current price cap. This means if you can fix for less than that, it may well save you money.

    The full explanation of this is in Martin's 'Should you fix?' guide. Important: We'd strongly suggest you read that guide before this, both to understand when it's the right time to fix, and how Utility Warehouse's tariff fits in.

  2. This is about Utility Warehouse's 'Green Fixed 36' one-year fixed tariff, which is on average 75% more than the price cap

    The Utility Warehouse Green Fixed 36 tariff is on average 75% more than the price cap, which if you judge it in isolation (from the other products you need to get it) makes it the cheapest switchable fix on the market, and it even undercuts most of the cheapest existing customer fixes being offered.

    Fixed prices of all firms change all the time, so do check that you're looking at the same tariff.  A quick summary of this one means…

    • It's available to new and existing dual-fuel and electricity-only customers paying by direct debit.
    • The rates are fixed until 31 August 2023.
    • You don't need smart meters, but Utility Warehouse is offering £50 bill credit if you get them installed.
    • It has £150 dual-fuel early exit fees (£75 for electricity-only).

    The exact rates vary by region, but as an example, in the Midlands, the standing charge is 38.2p a day for electricity and 17.3p a day for gas and the unit rate is 57.2p a kilowatt hour (kWh) for electricity and 13.4p a kWh for gas.

    The 75% figure we give is an average, but as what you pay depends on where you live and how much you use (due to an interaction of the standing charge and unit prices), you'll need to get a quote yourself to see the exact price difference between it and what you'll pay on the price cap (you should also find out the exact unit rates in your region).

    That's especially important for those on lower usage, because you have to factor the savings on that against the cost of the other products you'll need…

  3. You CAN'T just grab this fix, you need to take at least TWO of its other services to be able to access it

    To get access to this fix, you will need to take two of the following three services for at least the life of the fix (there's no loophole where you can sign up for an extra service and cancel, do that and you'll lose the fix and move to its standard tariff):

    • An 18-month broadband & line contract. It's £24 a month for its 35Mb deal, or £31 a month for 63Mb, both on an 18-month contract. Both have a £5.99 delivery fee and offer a 10% discount if you own your home and also take its mobile phone service. To see how it compares against other broadband deals, use our Broadband Unbundled tool.

      Important: The broadband contract is 18 months, while the energy fix is only 12 months, so you would be locked into the broadband six months longer than energy.

    • A rolling one-month Sim-only contract. For 5GB a month of data and unlimited minutes and calls it is £12 a month, for unlimited data it's £18 a month. Both are on a rolling one-month contract, and use EE. You can get this substantially cheaper (for example, under £3 a month for 5GB of data), see our Cheap Mobile Finder tool for the cheapest deals.

    • A 12-month boiler and home cover contract. This is not its home insurance policy, this is boiler and home cover, which covers an annual service, boiler and breakdown cover, plumbing, drainage and electrics, and security, roofing and pests costs £18 a month on a one-year contract.

    This makes things more complex as you have to factor in the cost of these on top of the energy bills. Though right now, as energy bills are so expensive, even though its fixed tariff is only a few percentage points cheaper than most of the cheapest fixes available elsewhere, that can still be a significant amount.

    That means this is a better bet for those with higher use, rather than lower use. As while its other services are usually far from the best buys, if you have high energy bills the savings on that can trump the extra you'll be paying on the other services (and really high users could save £100s). The gain is increased if you can make use of its cashback card.

    Plus as we're MSE, we compare it to the very best current deals, and you may not be on those already.

    So if you strongly value price certainty, and your existing supplier doesn't offer a deal or you're desperate to switch away from your current firm, this could be worth considering.

    Warning: Do check you're not tied into an existing contract. As you need at least two other services to get the energy deal, you'll likely need be out of contract for at least two of them. With both broadband and mobile, early exit penalties can be very high, and you may need to pay off the full amount remaining on your contract to leave. That could kibosh any gains.

  4. We've always had reservations mentioning Utility Warehouse due to its network marketing – but this deal merits it

    Utility Warehouse is a multi-utility firm designed to try to persuade you to use it for as many utilities as possible. In the past, it hasn't often troubled our best-buy lists as there have been other deals that are cheaper.

    However, this deal does substantially undercut any other energy fix being offered right now, so we felt it important to explain it to you. It is worth you understanding though, that…

    Utility Warehouse is commonly sold via 'multi-level marketing'

    While you can sign up directly with Utility Warehouse, it is commonly sold via its 'partners'. These are usually its customers earning an income by selling on products to others, often encouraging friends and family to sign up – and that is an 'opportunity' you will likely be offered if you sign up.

    This can mean some individuals (rather than the parent firm) can make comments about the company which can be over-exuberant. We'd caution to take some of the claims that are made about the firm elsewhere with a pinch of salt. And analyse the prices yourself.

    Network marketing is a controversial way to sell products, and there are anti-network marketing campaign groups which refer it as pyramid sales.

    This article does NOT mean MSE or Martin Lewis recommend Utility Warehouse, or network marketing

    Now we suspect – as happened when it was briefly mentioned before – a few of its sales people may try to jump on this page, so we want to be clear that this is not a flat recommendation for Utility Warehouse. This is simply a review of its new fixed tariff, with pros and cons, and how it stacks up against what's happening in the energy market at this moment, as we do with all firms when they have tariffs that are competitive.

  5. What would happen if Utility Warehouse (or any energy firm) went bust?

    More than 20 energy firms have gone bust in the last year. We have no information to suggest Utility Warehouse is at risk (that's not our expertise), and in some ways it has the advantage that it is not reliant solely on supplying energy for its income.

    Yet these days, with huge firms such as Bulb having gone under, it is a sensible question to ask – especially from a firm undercutting the rest of the market – of all but the very biggest energy firms (and probably even with them too).

    If it were to go under, you are protected by the Ofgem safety net. That means if it went bust you'd get continuity of supply and any credit you built up would be protected (you would be owed it by whichever firm took over the supply).

    However, it is very likely you would lose the fixed tariff and be moved to a standard, price-capped tariff at whatever rate it is then, which is no worse a position than most are in now (though obviously you may have lost the chance to fix elsewhere).

  6. One boon, especially for Sainsbury's shoppers, is its cashback card, which gives you up to 10% cashback

    Utility Warehouse customers also have access to its prepaid cashback card.

    The big ones are 3% at Sainsbury's and 4% at M&S, which are unbeatable, so if you regularly do your grocery shop at either of those this can make a substantial difference to the maths (for example, £100 a week Sainsbury's shopping nets £150 a year). There's also 5% at Argos and Boots and at about 19 other retailers and restaurant chains (though as spending tends to be lower at the others, it'll have less impact).

    And because if you go for the fix, you'll need other products too, you'd also qualify for 1% back on other spending – though you can get that from the Chase debit card without having to shell out for anything else or switch bank.

    The Utility Warehouse card is one you need to top up before you spend, so it's always best to top up these types of cards in small increments. But there's little risk if anything was to go wrong, as funds are effectively stored in a high street bank account, separate from the firm's own operating funds, so the funds would always be there for the card user.

    The only risk comes if the underlying bank goes bust, in which case you would have no recourse to get your money back, though that is extremely unlikely.

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