The number of energy suppliers and tariffs available to households has ballooned in recent years. It’s no longer a case of solely choosing from the ‘Big Six’ large energy companies – there are also now dozens of smaller providers to consider.
But while increased competition means much more choice – including more green and smart tariffs – some new suppliers haven’t survived for very long. In fact, eight small suppliers went bust in 2018, which was attributed to unsustainably low prices amid rising wholesale costs.
So, what happens if your supplier goes bust?
Thankfully, energy regulator Ofgem has a safety net in place to protect customers should their supplier go bust.
Most importantly, you won’t get cut off. In fact, Ofgem claims you won’t even notice any change as it switches your energy supply to a new provider.
Your new supplier
A few days after your old supplier goes out of business, you’ll be automatically moved to a new contract with a different supplier. Ofgem says it chooses the new supplier after a competitive process to find the best deal available for customers. Other than taking a meter reading, you don’t actually need to do anything yourself.
Your new supplier will contact you to explain how they will take on your account, including any direct debit arrangements. If you’re in credit to your old supplier, your new supplier will pay back the outstanding credit you may have. If you are in debt to your old supplier, discuss how this will work with your new provider.
Get the best deal you can
Your new contract will be a special ‘deemed’ contract, which may be more expensive than your previous deal. However, you are by no means stuck with it. When the new supplier contacts you, ask them to put you on their cheapest deal.
You can then shop around to see if you can get a better deal elsewhere. If you choose to switch, then you won’t be charged any exit fees.
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