Energy price rises and supplier failures: your questions answered

With energy companies announcing price rises and multiple suppliers closing over the last 18 months, we've been inundated with questions about how this impacts you and what to do if you're affected.

Here, we answer some of your most common questions about energy price increases and supplier failures, including what to do if you can't afford your energy payments, as well as what steps to take if your energy company fails.

• Read more: 10 ways to reduce energy bills

What if I can't afford bigger energy bills?

Help is available if you're worried you'll struggle to pay higher energy bills.

Start by contacting your energy supplier. It might feel like the last thing you want to do, but it won't cut off your supply if you work with it to agree how much you can pay.

Energy firms must agree a payment plan with you that you can afford. Your options can include:

• Reviewing your payments or debt repayments
• Reducing your payments or taking a payment break
• Allowing more time to pay
• Access to hardship funds.

You can also ask your energy supplier whether you can be added to its Priority Services Register, which gives free help and support if you're in a vulnerable situation.

It's worthwhile checking whether you are eligible for government schemes and benefits as well. These include:

• The Warm Home Discount: £150 off your electricity bills if you get the Guarantee Credit element of Pension Credit. You may also qualify if you have a low income.
• The Cold Weather Payment: £25 for each seven-day period between November and April that it's below 0°C. Certain benefits qualify you for this payment.
• The Winter Fuel Payment: £200 if you're over 66 or £300 if you're aged over 80. You should get this payment automatically if you get the State Pension.

See more help if you're struggling to pay your energy bills

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How does the Energy Price Guarantee impact bills?

The energy price guarantee (EPG) was due to freeze energy unit rates from now until October 2024 for customers in England, Scotland and Wales. But it will now only apply to all domestic energy bills until April 2023. 

It was initially planned to be in place until October 2024, but the government announced in October 2022 that this would no longer be the case for all domestic customers. 

Chancellor Jeremy Hunt instead revealed the government would look to target help towards those most in need, rather than doing so universally. In addition, the Treasury will conduct a review into how – and by how much – different groups of people will need help paying their energy bills from April 2023 onwards. 

This new approach is designed to save taxpayers money while targeting support to those most in need of help to afford their energy payments instead, according to Hunt. Bu it's not yet been revealed who will be eligible for this, or what the support will be. 

In the meantime, energy prices for suppliers will continue to change while the EPG is in place, but the government will be paying the excess instead of customers.

This means that if your energy prices are now at the fixed rates – somewhere around 34p per kWh of electricity and 10.3p per kWh of gas – they will stay like that through winter. 

You will also continue to receive the £67 (or £66) a month top-up payments via your energy company, in the Energy Bills Support Scheme (EBSS). But from April 2023, the EBSS payments will stop. At that point, unit rates are likely to increase and prices will go back to those set by the Ofgem price cap, which means households are likely to see a considerable jump in their energy bills. 

If you are currently on a fixed rate that's lower than the EPG, your payments will stay as they are until your contract ends. If you are on a fixed tariff that is currently being reduced by the EPG, then it will return to its original rates from 1 April 2023.

Find out more about the government's scheme to help with household energy payments

Will my energy bills continue to increase?

If you're on a variable energy tariff, your unit prices can change whenever your supplier increases (or reduces) its prices. You'll get 30 days' warning before this happens after the Energy Price Guarantee comes to an end in April 2023.

The majority of UK households saw their energy unit prices and standing charges rise in October 2022. That's because the price cap on out-of-contract energy deals increased, becoming £2,500 for an average household's annual bills - or more if you have a prepayment meter or use lots of energy.

If you're on a fixed deal, your rates can't change until it ends. But when it does you could struggle to find a tariff that's priced at a similar level.

The price cap could also increase again when it is next reviewed by the energy regulator Ofgem in January 2023.

This is partly due to high wholesale prices, but also owing to the costs of energy supplier failures. The providers that take on their customers can claim back some of the costs of doing this. This is spread across all energy suppliers - and their customers. Outstanding renewables payments from failed suppliers get shared across surviving firms too.

Why is my energy company increasing my direct debit? Is it going to go bust?

We've heard from some energy customers facing big increases to their direct debit payments.

Energy firms must take reasonable steps to make sure that your direct debit is fair. This means that it should be based on the best information they have, including the amount of gas and electricity you use.

The price cap on out-of-contract energy tariffs increased by 27% on 1 October 2022. If your tariff's prices rose with it then your direct debit may need to increase to cover this.

Energy companies should review your direct debit periodically (at least once a year) to make sure that it matches the cost of your energy use over a year. If it doesn't, they may increase your direct debit payments.

This applies even if you're on a fixed deal. Your unit rate and standing charge are fixed for the length of your contract but not your payments. Those depend on how much energy you use.

But if you're worried that your direct debit increase is much more than the rising prices, or you're in credit, you should challenge your supplier:

• Submit meter readings to your supplier to ensure your bills aren't based on estimates. Find out how to read your electricity meter and how to read your gas meter.
• Ask it to explain why your direct debit is increasing, and how it has chosen that amount. It must tell you.
• If your energy provider can't justify why your direct debit is increasing, you can try complaining to the Energy Ombudsman.

If you have built up lots of credit with your energy supplier, you can ask for it back at any time. Providers must refund you unless they have a good reason not to (which they'll need to justify).

Alternately, you might want to reduce your credit gradually over winter while you're using more heating. If so, check whether your direct debit hike is still necessary.

Will my energy supplier fail?

Many domestic energy suppliers have stopped trading over the last year or so, including: Avro Energy, Bristol Energy, Bulb, Colorado Energy, Daligas, Goto Energy, Green, Hub Energy, Igloo Energy, MoneyPlus Energy, People's Energy, PFP Energy, Pure Planet, Symbio Energy, Together Energy and Utility Point.

Although it's not unusual for a few energy suppliers to close their doors in autumn and winter, the failures we've since since autumn 2021 are uncommon and occurred because of climbing wholesale energy prices.

Suppliers do not have to disclose what is going on behind closed doors, so we often only find out that there is a problem when they announce that they have ceased trading. However, if this does happen, market regulator Ofgem has a process in place to find you a new supplier and honour any credit you have, so you won't lose out in the short term.

Your energy won't be cut off, and you won't lose any credit you have with your supplier.

Read more about what to do if your energy supplier goes bust.

If my energy supplier fails, will my gas and electricity be cut off?

No. Your gas and electricity supplies will continue as usual if your energy supplier stops trading. 

Ofgem will find a new supplier and you'll be automatically transferred. That company will then contact you, and you'll start paying it for your gas and electricity usage.

If you have a prepayment meter, any credit you've already loaded onto your meter can be used as normal. The new supplier will send you a new key, card or other equipment to top up your meter as a priority.

If you need to top up before you're sent a new key or card, contact your new supplier for help.

Read more about whether prepayment meters are right for you.

I'm with a small energy supplier - should I switch?

If you're on a cheap fixed deal, now is not the time to switch energy supplier.

Cheap deals disappeared from sale in autumn 2021, so you're very unlikely to find any deals at the same rates you're paying now. Those rates (your daily standing charge and unit price) will be fixed until the end of your contract.

But if you're on a variable deal and have been told the price is increasing, then it's worth comparing gas and electricity prices using Which? Switch to check how your rates compare. At the moment price-capped variable deals are some of the cheapest options so it can be worth moving automatically onto your supplier's out-of-contract rate when your fixed deal ends.

If your small supplier stops trading, then you'll be moved to another supplier - read more above.

Visit our Energy comparison service and use our ratings and expert advice to help you choose the right energy tariff for you, and read tips on how to get the best energy deal.

If my energy supplier fails, what should I do?

Don't panic. Your gas and electricity supply won't be cut off. Any credit you have will be protected.

You will be moved to a new supplier, chosen by energy regulator Ofgem. It usually takes a couple of days for a new supplier to be chosen, and a couple of weeks to be transferred.

The new supplier will get in touch with you to tell you about your new tariff, how payments will work and how you'll get any credit back.

While you wait:

• Take a meter reading (take a photo if possible so you have a dated record)
• Don't switch supplier (this can make it trickier to transfer you and pay back any money you're owed).

I can't access my energy account online: what should I do?

It's a good idea to download and bills and statements if your energy supplier closes so that you have them for your records.

But we've heard from some customers who have been unable to log in to their online account after their supplier stopped trading. Some failed suppliers take their website services offline.

Check back again later, or on another day. Some people have found that their account is up and running again (and even that the new supplier asks you to submit meter readings using it).

If not, wait until your new supplier contacts you. Your account records should be passed onto the new supplier so they can confirm how much credit or debt balance you have.

What happens to my Warm Home Discount payment if my supplier closes?

If you're in the 'core' group for the Warm Home Discount (ie you get the Guarantee Credit element of Pension Credit) then you should continue to get your payment from the new supplier.

This should happen automatically. The Department for Work and Pensions works with suppliers to identify customers who get Pension Credit.

Between October and December, you should have had a letter telling you how to get the discount. If you didn't, contact the Warm Home Discount helpline on 0800 731 0214.

If the new supplier chosen for you is very small, it may not have to pay the Warm Home Discount and you may lose your payment. However, this is unlikely - Ofgem has not typically chosen very small replacement suppliers and it takes into account the supplier's ability to make the payments when it's choosing which company will take over your supply.

Find out more about the Warm Home Discount.

If you're in the 'broader' group for the Warm Home Discount, you'll need to reapply to your new electricity supplier.

You'll be in the broader group if you don't get the Guarantee Credit element of Pension Credit but are on a low income and get certain means-tested benefits. Around one million people get the £150 payment in this group.

Energy suppliers have different criteria for who is eligible for payments in their 'broader' group. Some smaller suppliers don't make payments to those in the 'broader' group.

If you qualified with your old supplier, ask your new supplier whether you will qualify with it too. Be prepared to reapply.

It's worth applying as soon as you can, because the number of payments available from each supplier can be limited.

British Gas said that former customers of People's Energy who received the Warm Home Discount in 2020/21 will be added to its Warm Home Discount as long as it received the information. You can check when your account is set up.

EDF Energy said that former Utility Point customers who are eligible for EDF's 'support plus' scheme can apply once their accounts are fully migrated to EDF. There will be a maximum number of applications it can accept though.

How long does it take to get credit back from your failed supplier?

If you were in credit with your former energy company that's since stopped trading, there's no set time you could be waiting to get that credit transferred to your account with your new supplier.

Ofgem says your new energy provider, selected through the Supplier of Last Resort process, will contact customers to explain how they will take on their accounts. It told Which? that Suppliers of Last Resort work with administrators to determine the final credit balances of customers of failed suppliers and communicate this customers.

How quickly this can be done depends on several key factors:

• The quality of the data held by the failed supplier
• The number of customers being migrated as part of a Supplier of Last Resort process
• The arrangements made between a Supplier of Last Resort and the administrator for the failed energy company
• Any third party service providers to the failed supplier.

It is for this reason that there is no set period within which this process needs to be completed, and therefore how long those who were in credit with a supplier that's gone bust could be waiting before seeing that credit again.

• Find out more: 10 ways to reduce your energy bill