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Consumer Rights.

Updated: 22 Nov 2021

What should I do if my energy supplier goes bust?

If your energy supplier goes bust there's a process in place to ensure you’ll always have an energy supply. This guide will help answer your questions.
Which?Editorial team

Which? Switch

Energy price rises

Energy bills are to see their highest rise ever as the new price cap level comes into effect in October 2021. Millions of UK households are set to pay on average an extra £139 per year when the changes take place. 

If you're on a standard tariff you might see price increases as soon as October, but you can best the increases if you switch now. If you're on a fixed rate tariff, your rates are locked in until the end of the fixed period. At this point your prices might rise.

Some energy comparison websites have suspended their service as they can't currently offer cheaper tariffs, however the Which? Switch service is still running. You can use it to compare energy tariffs and find the best gas and electricity provider for your needs.

What to do if your energy supplier goes bust

If your energy supplier has gone bust please don't panic, your gas and electricity will not be cut off. You also will not lose any credit that you had with your supplier. 

Follow these steps to help with your to a new supplier:

  1.  Take a meter reading as soon as possible - you'll need to have this ready to provide to the new energy supplier, take a photo if possible. 
  2.  Ofgem will appoint you a new supplier - as the energy regulator, Ofgem is responsible for finding customers new providers if their supplier goes bust. Your supply will be protected and you'll be switched within a few days.
  3.  Don't switch until you're with your new supplier - Switching before you're with a new provider may make it more complicated if you're in debt or credit. Waiting until you're with your new provider will make switching smoother.
  4.  Wait for the new supplier to get in touch - Once Ofgem has chosen a new provider, it will be in contact with you to explain your new tariff and how to manage your balance if you're in debt or credit. You can ask to be put on a cheaper tariff at this point and can look to switch providers.

Too big to fail?

The ‘Special Administration Regime’ (SAR)

If you’re a customer of a big energy supplier and it goes bust, Ofgem might not be able to immediately find a new supplier using its usual process.

This could be because another energy supplier simply cannot afford to take on that many new customers quickly. 

If this happens don't panic, your gas and electricity will not be cut off.

Ofgem will appoint a special administrator to run your failed energy supplier until it is:

  • rescued (for example, through restructuring)
  • sold
  • has its customers transferred to different suppliers.

A special administrator is different to a normal administrator and it has an obligation to consider consumers' interests as well as the creditors owed money by Bulb.  

It means customers you have short-term certainty that your supply, current tariff, credit balance and bills will continue as normal.

Will my power be cut off?

No, your gas and electricity supply won't be cut off. Your supply will continue as normal and Ofgem will move you to a new supplier as part of a 'safety net'. You shouldn't notice any change except for a new supplier being appointed for you.

This new supplier is called the ‘supplier of last resort’ and is chosen by Ofgem through a ‘competitive’ process.

Take a meter reading as soon as possible to track how much gas and electricity you used with your old supplier. Keep it safe as you will need to give it to the new supplier.

How will my new supplier contact me?

If your energy company has gone it might put a notice on its website or email customers, but this isn't guaranteed to happen. 

Ofgem won't contact each customer individual, instead it will publish updates of which suppliers have ceased trading and the proposed new supplier. 

Your new supplier ill contact you once the transition is complete - however this can take a couple of weeks.

If you receive any suspicious calls, emails or text, check Ofgem's website to confirm who it has appointed as your new supplier and then contact that supplier directly.

Will my tariff change?

Your old tariff will end and you will be set up on a special ‘deemed’ contract - this means a contract you haven’t chosen - with your new supplier.  This contract will last until you change it. 

When your new supplier contacts you, ask to be put on their cheapest tariff or look around to compare other deals and switch supplier if you want to.

The switch to a new provider shouldn't take longer than a few days if your previous provider has gone bust. However, it could take up to 21 days to switch supplier with an average of 18 days for gas and 16 days for electricity.

This doesn't include the 14 day cooling off period where you can still change your mind.

Will my energy bills go up?

According to Ofgem, it's likely your energy bills will go up as 'deemed' contracts are usually more expensive. The regulator says it will always try to get you the best possible deal for those in this situation.

Also deals sold by firms that have stopped trading have often been cheap in order to attract customers to join them. So there could be quite a big price difference between your old and new suppliers’ tariffs.

Your new supplier will inform you of the new rate and when they will switch and take over your supply.

Or, shop around for a cheaper supplier using the Which? Switch service.

You won’t be charged exit fees if you decide to go with a different supplier to the one Ofgem has chosen for you.

Should I cancel my direct debit?

Ofgem says that you can cancel your direct debit if you want to. You will be able to set up a new direct debit with your new provider.

The new supplier will get in touch and help you set up your new account and explain how it will arrange your direct debit payments.

If you are in credit the energy supplier should not take any direct debit payments from you.

If you are in debt and owe money to the energy supplier then any direct debit payments will be taken as normal. You will be able to set up a new direct debit with the new supplier when they contact you.

Will my credit move with me?

Your new supplier will pay back the outstanding credit you may have. Once Ofgem has appointed the new supplier, it will contact you to explain how this will work.

Usually your credit will be automatically added to your account with the new supplier but costs for the energy you have used but not been billed for will be deducted from your credit.

It's a good idea to take a meter reading and a note of your balance with the failed energy supplier so that you have it ready when your new supplier gets in touch with you.

If you switched away from the supplier before it stopped trading, you should still be able to get your credit balance back.

Ofgem said it looks to choose a supplier which will pay back money due to customers who have switched.

What happens to my debt?

This depends on what your new supplier agrees with your old supplier’s administrators.

If your new supplier has arranged to take on the customer debt of your old supplier, you will need to pay back the debt to your new supplier.

If this has not been arranged, you won't have to pay your new supplier any money you owed to your old supplier.

However, you may still have to pay back your old supplier or their administrator.

Your new supplier will explain to you how any repayments will work.

Help if you're struggling to pay your bill

There is help available if you're struggling to pay your energy bill. For example, you can ask your supplier to review your payment plans, offer payment breaks or reductions to allow you more time to pay. 

26 suppliers are currently signed up to an energy sector commitment to help customers worried about paying their bills. The pledge builds on support already in place for customers in need and includes adjusted repayment plans and provision of emergency credit. 

You can find more information on what to do if you're struggling to pay your bills on the Ofgem website.