What happens if your energy supplier goes bust? Your top SIX questions answered
Martin Lewis offers advice on rising energy bills and direct debits
We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info
Energy suppliers have started to crumble as the UK enters the coldest months of the year. Several companies have cited growing costs associated with their profession and the Government’s energy price caps as primary aggravators. As the crisis grows and other companies sit on the precipice, Britons will want to prepare their homes for the worst, and Express.co.uk is on hand to answer some of the most pressing questions.
What happens when your energy supplier goes bust?
Since August this year, the snowballing energy crisis has claimed 13 companies providing energy for thousands of households.
They include the following:
- Hub Energy
- PfP Energy
- MoneyPlus Energy
- Utility Point
- People’s Energy
- Avro Energy
- Igloo Energy
- Symbio Energy
- Pure Planet
- Colorado Energy
Other firms have since signalled issues and fear meeting the same fate as those listed above.
And people will have pressing questions on their minds, including what could happen to their power, how they will receive a new supplier, and whether their bills will increase.
What happens to your energy supply?
The Government’s Office of Gas and Electricity Markets (OFGEM) oversees the UK’s energy companies.
When an energy firm goes bust, the department picks up their slack and moves their customers to a new company without interrupting their home energy supply.
Representatives will choose the supplier following a “competitive process” that sorts out the best deal.
How long will it take to get a new supplier?
Companies will bid for floating customers, and it could take a “few days” to find a new one.
The department advises people to sit tight while OFGEM handles the handover.
The process should take “a few days”, and people won’t notice “any change” until their new supplier contacts them.
People unhappy with the choice can find a new supplier themselves and won’t have to pay exit fees.
Can you still access accounts and records?
When suppliers cease business, they may extract their online presence, meaning former customers can’t find previous accounts.
In this case, customers should wait for OFGEM to complete the handover, as when the new firm will receive these details.
Representatives will have information on debt or credit and other account details provided by customers.
What happens to credit and debt?
People impacted by a folding energy firm will receive a refund if their account is in credit.
Those with debts may find their current arrangements change, however.
Customers should only pay back their debt if their new supplier agrees to take it on.
If not, they will not need to pay, although they may need to continue paying back their former supplier.
Grants of £5k for pump heaters as government plans to ban boilers – INSIGHT
Supply chain crisis adds £1,100 to pensioner bills – ANALYSIS
How renewable are the Royal residences? Inside greenest royal estates – EXPLAINER
What happens to your energy contract?
Most people custom build a contract with their chosen company, which will change if they go bust.
New suppliers chosen by OFGEM will put customers on a “deemed” contract they have not chosen.
Customers can then make changes as they see fit.
Will your bills go up?
Suppliers will construct deemed contracts on their own terms, meaning it is possible bills could increase.
OFGEM’s process should mean the terms of a new contract closely resemble those agreed upon previously.
Ultimately, however, it will depend on the negotiating process undertaken by firms as they negotiate customer takeover.
If the replacement company takes on legions of new customers, they will have to buy more energy due to demand and may have to nudge up their overall pricing.
Source: Read Full Article