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Updated: 21 Apr 2022

Energy price rises and supplier failures: your questions answered

Answers to some of Which? members' most common questions, including what to do if you can’t keep up with your bills.  
Marianne Calnan
Energy price rises

With energy firms announcing price rises and dozens closing, we’ve been inundated with questions about how the crisis could impact you and what to do if you’re affected. 

Here, we answer some of your most common questions. Click on the question(s) above that you’re most interested in to find out their answers.

We're all feeling the strain of rising bills right now. Get all our latest cost of living advice and tips

Will the Russia-Ukraine conflict impact the UK energy market?

Electricity pylons

The Russia-Ukraine conflict is expected to drive our energy prices even higher, and has already caused the price of oil to surge to its highest level in over seven years, while future gas prices jumped by 60% in just one day in March 2022. Prime Minister Boris Johnson told his colleagues in the Cabinet that British consumers should prepare to endure even steeper energy prices as part of the cost for inflicting ‘pain’ on Russia through sanctions.

The government has also made assurances that the UK is not dependent on Russia for its gas supply. It said less than 4% of the UK’s gas supply came from Russia in 2021, adding that the ‘vast majority’ comes of imports come from ‘reliable suppliers’ such as Norway.

The government has emphasised that it is vital that European countries on the continent reduce their reliance on Russia for gas even further. This can be done through by acquiring gas through alternative supplies such as the global liquefied natural gas (LNG) market, which the government calls an ‘increasingly important component of the global energy supply chain.’

Ease the squeeze: How Which? can help you with the rising cost of living

What if I can't afford a bigger energy bill? 

Cutting energy bills

‘I’m more worried about the energy price hike than literally anything else right now for the direct and substantial effect it will have on low-income families.’ – Twitter user

Help is available if you’re worried that you’ll struggle to keep up with higher energy bills. Start by contacting your energy supplier. It might feel like the last thing you want to do, but your provider 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. 

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

In addition, you could be worthwhile to check whether you are eligible for the following government schemes and benefits:

  • The Warm Home Discount is £140 off your electricity bills if you get the Guarantee Credit element of Pension Credit. You might also qualify if you have a low income.
  • The Cold Weather Payment is £25 for each seven days between November and April that it’s below 0°C. Certain benefits qualify you for this. 
  • The Winter Fuel Payment is £200 if you’re over 66 or £300 if you’re over 80. You should get it automatically if you get the State Pension. 

Find out more about what help is available if you’re struggling to pay your energy bill

Will my energy bill go up because of higher wholesale prices?

If you’re on a variable deal, your price can change whenever your supplier increases (or reduces) its prices. You’ll get 30 days’ warning of this change.

Around 22 million customers face a bill increase from 1 April 2022. That’s because the price caps on out-of-contract energy deals will rise by 54%, adding £693 on average to annual bills, or even more if you have a prepayment meter or use lots of energy.

If you’re on a fixed deal, however, your rates can’t change until it comes to an end, and when it does you might struggle to find a deal as cheap as the one you’re on currently.

The price surges come partly due to high wholesale prices, but also thanks to the costs of energy suppliers closing. The providers which 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 are also shared across surviving providers.

Read more about how the price cap will impact you

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

If you’re in the ‘core’ group for the Warm Home Discount (i.e. 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 energy suppliers to identify customers who get Pension Credit.

Should you be eligible to get the discount, you should get a letter between October and December detailing how to get it. But if you didn’t get a letter and you should have, you can ring the Warm Home Discount helpline on 0800 731 0214.

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

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 £140 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 provider whether you will qualify with it too, and 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 its ‘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.

Will my energy supplier fail?

Dozens of domestic energy suppliers have stopped trading over the last several months, 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. Plus there are rumours that others are in trouble.

While it’s not unusual for a handful of energy suppliers to go bust in the autumn and winter months, Kwasi Kwarteng, secretary of state for business, energy and industrial strategy, warned that there may be more than usual in the autumn of 2021/22.

Gas and electricity 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.

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. Should your energy company stop trading, it’s important to remember your energy won’t be cut off and you won’t lose any credit you have with your provider. Your gas and electricity supplies will continue as usual even if your energy supplier stops trading.

Ofgem will find a new supplier and you’ll be automatically transferred. Your new energy 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.

Find out whether a prepayment meter is right for you

 If my energy supplier fails, will I have to pay more?

‘We had a fixed rate deal (ending Feb) with one of the failed energy companies and we’ve been switched to a firm who has put us on a variable tariff. Don’t they have to honour existing fixes?’ – Twitter user

Unfortunately, if your energy supplier fails, you will probably have to pay more when you move to a new provider. If you were on a fixed deal with your former supplier, the contract you had for that tariff was only applicable to that provider and not the new one chosen for you by Ofgem.

Some of the recently failed suppliers had offered quite cheap energy deals in the past. Last year, when you may have chosen your tariff, gas prices were low, but they’ve risen more than 250% since January 2022, according to industry group Oil & Gas UK. That means energy companies aren’t currently selling deals as cheaply as they once were.

If your supplier closes, you’ll be moved to a new supplier and put onto its ‘deemed’ tariff. This tariff is one you haven’t chosen, so you can stay on it for as long (or short) a time as you choose and won’t be charged exit fees to leave. However, these tariffs can cost more because ‘the supplier takes on more risk’, Ofgem explains. For example, it might have to buy extra wholesale energy at short notice for new customers.

Wholesale energy is very pricey right now, but you can ask the new supplier to put you on its cheapest tariff. Make sure you use Which? Switch to check the prices of tariffs on sale currently. Unlike some commercial switching sites, Which? Switch shows the whole market, so even if we can’t move you to the cheapest supplier, you’ll know where to find it and can contact the company directly to switch.

Read our tips on how to get the best energy deal

Why is my energy company increasing my direct debit?

Credit card and laptop

We’ve heard from some energy customers facing massive increases to their direct debit payments.

Energy firms have to 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 will climb by 54% for a typical energy user on 1 April 2022. If your tariff’s prices rose with it then you’ll pay £693 more on average over the next year – and 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 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.

While your unit rate and standing charge are fixed for the length of your contract, your payments are not, and instead 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:

If you’ve built up lots of credit with your energy supplier, you can ask for it back at any time. Suppliers 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.

Find out more about why energy direct debits are so high

If my energy supplier fails, what should I do?

Couple worried about their energy bill

‘My energy supplier ceased trading – I have just been informed. I’m confused as to know what to do – will I get my supply terminated?’ – Which? member

‘I received a general email earlier this week saying the company has ceased trading. I’ve cancelled my direct debit. Do I need to take any other action at this point or wait until I hear about transfer scheme arrangements under the government scheme. What happens now?’ – Which? member

Don’t panic - your gas and electricity supply won’t be cut off.

Any credit you have will be protected and you will be moved to a new supplier, chosen by energy regulator Ofgem. This is called the Supplier of Last Resort.

It usually takes a couple of days for a new supplier to be chosen, and a couple of weeks to be transferred. Your new provider 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).

How long does it take for credit to be returned after my supplier has gone bust?

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 to 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.

Here’s our advice on how to complain to your energy provider.

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

Energy monitoring

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.

At the moment price-capped variable deals are the cheapest options on the market. So it's worth moving automatically onto your supplier’s out-of-contract rate when your fixed deal ends. It'll be more expensive than your fixed tariff, but the cheapest option right now. If your small supplier stops trading, then you’ll be moved to another supplier.

Fixing a tariff will provide more price security, as you'll know the prices can't change until your contract ends. But with no energy companies currently offering fixed deals cheaper than the price capped variable rate, you'll pay a premium for this security. 

Read more advice on the pros and cons of small energy companies.