Yes. Many rail tickets can be cheaper either by "splitting" the journey into a combination of tickets, or by buying for a longer journey. This is because some of the most popular journeys are deliberately overpriced by greedy pricing managers.
Go on
http://eastcoast.co.uk from there add the details of your journey. For you it looks like the 0717 train from Taunton will be the best, costing £97 (without a railcard) and arriving at Colchester for 1049
According to Avantix a Off Peak Return (SVR) from Taunton (TAU) to Colchester (COL) is £91.00 not valid until 0840 from Taunton ! Which means you cannot get to London until 1125. The Super Off Peak Return (SSR) at £75.60 is not valid until 0940.
The price you quote at £97 appears to be one way (the OP wants a return) Advance fare, which is a rip-off.
Anyone else is expected to pay £224 for an Anytime Return (SOR), or £112 for a single. Ludicrous!
Taunton to Ipswich is £85.40 SVR but has a rather unfortunate restriction for arrivals into Paddington (PAD) which means the 1000 arrival cannot be caught, and the next one is a lot later arriving 1125 at PAD. The SOR to Ipswich is £222, making it £2 cheaper than to COL.
I suggest a B&B!
If you must travel at this early hour then you will need to be creative...
An Off Peak Return Taunton to Nottingham (route Not London) valid via Reading (book online and get reservations as the guard may claim its not valid) code 8A Valid any train. This ticket is £70.90 (without railcard - cheaper with one) and takes you to the next stop, Reading.
From Reading (RDG), I believe a Reading to Ipswich Off Peak Return may be your best bet, at £39.70 this is valid out of Liverpool Street (LST) from 0930 and "Off-Peak tickets for journeys starting within the Network
Area to destinations outside the Network Area with travel via London are valid by any train to London, to connect with trains from London." I believe should make it valid into Paddington for a time that connects with trains that depart from 0930 so arriving at PAD at 0906 or so should be fine. However there are rules about arrivals into Paddington that I do not think should over-rule the Network area rule however the ticket issuing sites think otherwise. It's a debatable point. Otherwise, an Anytime Day Return from RDG to COL is £51.50.
I would certainly buy a railcard (if you are a student you will be eligible) and if you get the Nottingham ticket be sure to get reservations as the guard may query it.