New cheapest energy deal – but it comes with a catch

A new energy tariff promises to cut costs for households this autumn, but only if customers give up their mobile and broadband deals.

The energy price cap, which limits what suppliers can charge customers on variable tariffs, is now predicted to rise to £2,879 in October, more than £900 above the current level, according to analyst Cornwall Insight.

Supplier Utility Warehouse has introduced a 12- month fixed tariff for £ 2,250, some £ 230 less than the next cheapest fixed deal on the market and £ 625 less than the average fixed cost, according to comparison website Uswitch.

This, combined with the Government’s £400 deduction to energy bills in October, means that by autumn, households would pay £121 less than they do now by switching.

However, the deal is only available in a “package” form, meaning customers must also take out two of either a broadband, mobile or insurance contract with the provider.

Utility Warehouse’s cheapest superfast broadband deal is £21.60 a month for new customers, while its cheapest SIM-only mobile deal is £12 a month.

The provider’s broadband is slightly cheaper than the UK average, which is around £ 24 a month according to Uswitch.

The average Sim-only contract costs £ 8.80 a month, which is lower than Utility Warehouse’s offering.

Will Owen from Uswitch said: “Household budgets are feeling the squeeze, and it’s reassuring to see a provider making steps to limit the impact of the rise in living costs.”

But he warned that packaged deals such as this may not be suitable for all customers, who could find better deals by shopping around.

“Bundling your energy and telecoms with one provider in exchange for a discount could be a useful way to minimise costs,” he said. “But others may feel tied into products they would rather have with other suppliers and want the ability to shop around.”

Cornwall Insight said that the price cap will likely remain high next year, rising again to £2,907 in January.