Energy suppliers going bust: what to do

Soaring gas prices have led to many energy suppliers going bust over the past few years. This has been most noticeable since the pandemic.

But what does it mean for you if your energy supplier is no longer in business? Don't worry - there are plans in place to maintain your energy supply.

Which energy suppliers have gone bust?

Energy suppliers have been slowly going bust for the last 2-3 years. But this has ramped up over the last 12 months, beginning in the summer of 2021 amid surging natural gas prices.

Given the regulator Ofgem's price cap to protect consumers, many energy suppliers weren't able to pass on sudden sharp increases in wholesale gas prices fast enough to remain in business.

It means a significant number of energy suppliers have already gone bust:

What happens if my energy supplier is going bust?

If your energy supplier is going bust, don't worry – you won’t lose your gas or electricity.

The energy regulator Ofgem has created a ‘safety net’ to make sure that anyone affected isn’t left without energy. So, there shouldn’t be any difference in your gas and electricity supply.

You should take a meter reading and wait for Ofgem to appoint a new supplier – their advice is to wait for their process to finish and not start a new switch until this has happened.

What happens if my old account is in credit or debit?

As well as protecting your gas and electricity supply, Ofgem’s safety net also protects any credit balances you might have.

Your new supplier should pay back anything you’re owed from your account, minus costs for the energy you’ve used during the switching process.

But with energy suppliers going bust, it’s not so clear cut what happens if there's a debit on your account, It depends on what your new supplier has agreed with the old supplier’s administrators.

If your new supplier has taken on customer debts from your old supplier, you need to repay the debt to your new supplier.

Otherwise, you may need to repay the debt to the old supplier or their administrator. Your new supplier is meant to explain how this will work when they take over.

When will I know who my new energy supplier is and the date I'll be switched to them?

The Ofgem automatic switching process with energy suppliers going bust should only take a few days. When your new supplier contacts you, always ask to be put on their cheapest tariff.

In some cases, the switching process can take a lot longer as Ofgem might ask the courts to appoint an administrator to run your existing supplier. Your energy supply and any credit balance will still be protected.

What happens if I have a smart meter?

This depends on what kind of smart meter you have.

If you have a SMETS 2 smart meter, your new supplier should be able to connect to the meter. In this case the switch should be seamless and your smart meter should work as normal.

If you have a SMETS 1 smart meter, chances are your new supplier can't connect to it. In this case you need to send meter readings as you would with a traditional meter.

You might be able to get your new supplier to upgrade your smart meter to a SMETS 2 meter free of charge. Get in touch with them to see if this is the case.

What rate will I pay under my new contract with a new energy supplier?

You'll be placed on a special ‘deemed’ contract with a new supplier. You'll find out the new rate when they take over, but it's likely to be on the new supplier's standard variable tariff (SVT). It's up to you how long the deemed contract lasts.

Ofgem claims it aims to get the best deal possible when it chooses a new supplier. But it also says that once the new supplier gets in touch, you should ask them to put you on their cheapest deal.

Can I switch energy suppliers after Ofgem has moved me?

Yes, you can switch energy suppliers once Ofgem has moved you and the new supplier has contacted you.

You should ask the supplier appointed by Ofgem to put you on their lowest tariff, but you’re also free to shop around to see if you can get a better deal elsewhere.

Ofgem has said you won’t have to pay an exit fee if you decide to switch energy supplier after their appointed supplier contacts you.

What should I do if my energy supplier has gone bust the same time I'm moving home?

Find out who the supplier is for your new property and then ask them to put you on their cheapest tariff – you can also compare quotes to see if you can get a better deal elsewhere. There won’t be exit fees to pay if you decide to switch.

But if the supplier at the new address is also going bust, you should wait until Ofgem has appointed a new supplier there as well before you try to switch.

It’s a good idea to use a mail redirection service for your old address because the newly-appointed supplier should try to contact you. If you have credit on your account, they're meant to tell you how they’ll be refunding the money.

As always with moving home, you should take meter readings at both the old and new property to make sure you only pay for the energy you use.

I've got a complaint - who do I go to?

This could be a little tricky with energy suppliers going bust as your new supplier isn't required to take on unresolved complaints from your old supplier.

But if you do have a complaint that’s unresolved, you can still discuss it with the new supplier to see if they can help.

If you have a complaint that’s with the Ombudsman, they’re meant to contact you to discuss the next steps.

How do I save money on my energy bill?

Energy prices have gone up considerably recently, with energy suppliers going bust as a result.

Now more than before it pays to keep your energy use down.

Here are some ways to save money on your energy bill:

Turn your thermostat down – according to the Energy Saving Trust, lowering your thermostat by a degree could save around 10% on your energy bill.

Turn down the valve on radiators – you might be wasting money by having some of your radiators on too high.

Turn off switches – switching off appliances at the plug could save you £55 per year.

You could also take measures to boost energy efficiency, such as:

• Using LED bulbs
• Insulating your loft
• Installing double glazing
• Using a smart meter
• Converting to solar energy using solar panels