Utility Warehouse review: A con or is it really cheaper?

Are you looking to save money on your utility bills? Some companies claim you can find a better deal if you have all your bills from one provider. Take a look at this Utility Warehouse review to see if it really is cheaper than the rest.

I’m fairly active on Facebook. By that, I mean I read what others say, chuckle and then go on about my day. However, I also belong to several groups in my local town. As I scroll past the usual posts about bad parking/driving, complaints about fireworks or pictures of missing cats (along with the obligatory joke about the Chinese takeaway), I often see posts about who is the best energy provider.

I usually take my time to answer these, often pointing people toward price comparison websites or dropping my Octopus referral link into the conversation. But I have noticed a lot of people recommending a company called Utility Warehouse. Apparently, they offer some great deals, so I thought I would check them out.

Who is Utility Warehouse?

Utility Warehouse (UW) is a discount club that offers energy bundled with other utilities. According to Which? they became an energy supplier in 2013 after buying 770,000 customers from Npower. They are the biggest energy provider outside of the “Big 6”. They also scored top for customer satisfaction out of all the energy providers – although that bar is quite low…

Who owns Utility Warehouse?

Telecoms Plus PLC owns the brand. The company is licensed by the energy regulator Ofgem and regulated by Ofcom.

How does Utility Warehouse work?

Utility Warehouse doesn’t advertise as much as other companies. They have a far cleverer way of operating. Instead of bombarding you with TV and radio adverts, Utility Warehouse recruits agents (also known as partners). More-or-less, anyone can become a partner. And who is more likely to convince you to switch providers – a random stranger or a family member?

Although partners claim that the lack of advertising keeps Utility Warehouse’s costs down, that’s not quite true. As you can see from this article, a lot of money is spent on expensive celebrations for their partners.

So, is it a pyramid scheme?

No. Pyramid schemes are illegal in the UK, and Utility Warehouse would not be allowed to operate one.

This type of sales technique is known as Multi-Level Marketing, something I am not a big fan of. You can see how few people actually do well from MLMs, with a 99% chance of failure.

What does a partner do?

In my relationship, not much. Boom! (Don’t worry, my wife never reads my blog anyway). It’s the job of a partner (or agent) to recruit new customers to Utility Warehouse. Doing so will earn them a commission. Occasionally, you may see a car driving around town with Utility Warehouse splashed all over it, which will often belong to one of these partners. But the most common place partners operate from is social media. That is why you see so many people recommending Utility Warehouse – it is a potential money-spinner for them.

A stairway to success

A partner can make money in two ways – either by finding new customers for UW or by recruiting new partners. When a partner they have recruited bags a new customer, they will earn a commission.

So, the more partners they recruit, the more they can make. And as you become more established, they move up the ‘stairway’.

• Step 1 – Distributor
• Step 2 – Qualified Distributor – gather 3 personal members
• Step 3 – Team Leader – 10 personal members and 50 customers
• Step 4 – Senior Team Leader – 15 personal members and 250 customers
• Step 5 – Group Leader – 20 personal members and 750 customers
• Step 6 – Senior Group Leader – 25 personal members and 2,000 customers
• Step 7 – National Group Leader – 50 personal members and 7,000 customers
• Step 8 – National Network Leader – 100 personal members and 25,000 customers

As you can see, somebody at Step 8 will have recruited at least 100 partners, with over 25,000 customers between them. There is the potential to make a lot of money here.

Ask yourself this though, are partners looking at saving you money or moving up the ladder?

Is Utility Warehouse really cheaper?

I am very sceptical of any MLM, but I can hardly write a review of Utility Warehouse without checking on the prices.

Below is a comparison of how much Utility Warehouse charges and the cheapest deals available on the market.

	Best-priced competitor	Cost with Utility Warehouse
Energy	£172.27 (Octopus Energy)	£173 (£169 after discount)
Broadband	£18.83 (Shell Energy)	£24 (£21.60 after discount)
Mobile – 5GB data	£4.99 (Lebara)	£12
Boiler & emergency cover	£14.96 (Home Emergency Assist)	£20
Total cost	£211.05	£229 (£222.60 after discount)

As you can see, by choosing the best-priced competitors, even after taking into consideration the UW discount, you will save £11.55 per month (£138.60 per year).

And you need to remember that some of these prices are special introductory rates. For example, your broadband will increase to £32.39 after 18 months. To avoid this, you will need to remember to haggle with UW when the contract ends.

At the time of writing this review, Utility Warehouse is offering £50 credit to new customers who switch and have smart meters installed. However, you could earn £50 credit from Octopus Energy when you switch, without the need for smart meter installation.

Bigger savings using cashback sites

I also haven’t mentioned that you can save even more money with the better-priced competitors by using sites like cashback sites like TopCashback. Home Emergency Assist, Lebara and Shell Energy are listed on there, and you could earn over £125 back. That’s a saving of over £10 per month.

But, there is a cashback card

It would be unfair of me not to mention UW’s cashback card.

This is a prepaid debit card that you load funds onto. Every time you make a purchase, you receive cashback. There are 50 retailers that offer between 3-7% cashback (including Sainsbury’s, Argos and B&Q) whilst everywhere else gives you 1% back. Some credit cards offer a similar cashback scheme, although most are not as generous as 1%.

The earnings are capped. If you have one service from UW, you can earn a maximum of £5 per month. With two or three services, it’s £10 per month and £15 if you have all four.

On the downside, you have to pay £5 to open the account and then pay a monthly subscription fee of £2.

Is Utility Warehouse a rip-off?

No, the tariffs from Utility Warehouse are still better than many of the large companies. They’re worth looking at if you want a simple, one-stop solution. However, you can still find better value if you shop around. And using cashback sites, you could save over £200 per year not going with UW.

Should you become a UW partner?

It’s not something I would consider. First, you must pay £10, which covers the cost of opening your account and training. After four months, you will have to pay a £3 ‘monthly license fee’.

And you need to chase sales. Do you really want to be “that friend” who is constantly badgering others to change their provider? And once you’ve got through your friends and family, where next? According to the Guardian, the average partner earns £505 per year. And that’s before tax and any other costs you may have.

What other people say

When writing my reviews, I always look elsewhere to see what other people think. Over at Trustpilot, Utility Warehouse scores a fairly decent 4.2 out of 5. Many reviewers claim that they have saved money and received great customer service. But bear in mind it’s in the interest of Utility Warehouse partners to write positive reviews about the company so they can attract new customers and earn more money. Whether all of these reviews are from genuine users who don’t have an interest in attracting new customers… I’m not sure. Some of the reviewers claim to have been with the company for over seven years, which begs the question – why write it now?

On the negative side, reviewers complain about bills increasing sharply and issues when trying to switch away.

Should you switch to Utility Warehouse?

Utility Warehouse does offer competitive pricing and it’s probably easier for many people to have just one bill. But, you will pay a fair amount more for the privilege. Is it really worth the extra money?

Take a look at the Utility Warehouse site to find out more.

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