The last few years have seen a number of energy providers leaving the market, thanks mainly to the sharp increase in the cost of energy since 2021.
If your energy provider announces that it is stopping trading, any credit balance you have with them is protected and guaranteed by the energy regulator Ofgem. It will assign you a new energy supplier, so you won’t have to do anything. Your energy supply won’t be disrupted, so the only change you’ll notice is that you’ve been moved to a different supplier.
Neil Lawrence, Director of Retail at Ofgem, said: “We know this is a worrying time for many people and news of a supplier going out of business can be unsettling. I want to reassure affected customers that they do not need to worry, under our safety net we’ll make sure your energy supplies continue”.
“Ofgem will now choose a new supplier for you and whilst we are doing this our advice is to wait until we appoint a new supplier and do not switch in the meantime. You can rely on your energy supply as normal. We will update you when we have chosen a new supplier, who will then get in touch about your new tariff.”
Ofgem advises that if your supplier has gone bust, you should take meter readings as soon as possible. Once your new supplier has been in touch, customers can ask to be put on their cheapest tariff, or shop around for a better deal from another supplier. You won’t be charged any exit fees for switching away from your new supplier.
If I decide to switch from my new supplier how long will it take?
Comparing available energy deals typically takes just a few minutes. You can find all the information you need to complete your switch on your most recent bill. This includes the name of your energy supplier and tariff, your energy consumption, what you’ve paid and the current balance. This will either be a credit or debit balance.
Once you’ve chosen which deal you want to move to, switching energy tariffs should take no more than 21 days, and your new supplier should do all the work on your behalf. Your final bill from your old supplier should arrive within six weeks. It’s the same meter and you won’t need any new pipes, nor will you lose your energy supply – the only difference will be the cost and who you pay.
If you’re considering switching your energy provider, it’s worth doing plenty of research so you can be certain you’ve found the best possible deal to suit your needs. Comparison websites such as MoneySuperMarket, Uswitch and Compare the Market enable you to compare the latest energy tariffs, whether you’re looking for a fixed or variable deal.
Why are so many energy providers stopping trading?
Like so many other businesses, the pandemic combined with soaring wholesale gas prices hit energy suppliers hard, particularly smaller providers.
International sanctions also mean that Russia is no longer supplying the UK with as much gas as before. Recent winters have been colder and longer than usual too, which has further depleted energy supplies.
Prices have also been impacted by strong demand for liquified natural gas in Asia, which has reduced the amount that has reached Europe.
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The current energy crisis is causing significant disruption, and affecting the tariffs energy providers can offer. For all the most recent information, read our article on the current energy crisis and what to do about soaring costs.