What happens if your energy supplier goes bust?


Updated 29th September 2021

If you’ve heard that your energy supplier has ceased trading it’s normal to be worried or concerned. In this blog we’ll talk you through what this means for you and what steps you need to take in the short term.

The following suppliers have recently ceased trading due to turbulent market conditions.

  • PFP Energy
  • People’s Energy
  • MoneyPlus Energy Limited
  • Utility Point
  • Avro Energy
  • Green
  • Enstroga
  • Igloo Energy
  • Symbio Energy

Why does this happen?

Businesses close all the time and energy suppliers are no exception. Energy suppliers can cease trading for a number of reasons, the most common explanation is that they are unable afford to purchase enough energy to provide to their customers.

Ongoing issues in the energy market mean many small suppliers are currently at risk of collapse.

 

What happens now?

If your energy supplier has ceased trading, you do not need to worry. Your energy supply is protected by Ofgem and you will not be cut off. Your credit balance will be protected and Ofgem will appoint a new supply to take over your account. This process is known as ‘Supplier of last resort’ or SOLR.

The new supplier will be in touch with details of your new account and tariff, they will require a meter reading from the date they took over the account so it’s a good idea to take one as soon as possible. You should contact them if you’ve not heard from them within a couple of weeks.

Do not switch your energy supplier in the meantime. You may have difficulty if you need emergency support or need to retrieve a credit balance. Wait until your new supplier has set up your account and confirmed your old suppliers final bill.

 

I’ve just heard my supplier has gone out of business, what do I do?

If you’ve just heard that your supplier has ceased trading read this blog carefully. As soon as possible you should do the following

  • You should take meter readings as soon as possible, if you can take a date stamped photo although this isn’t essential.
  • Keep any old bills you may have; these are helpful if you need to prove your account balance or payment history.
  • Make a note of your account balance at the time you heard the supplier went out of business.
  • Your direct debit will transfer to your new supplier however you can cancel it now if you want to and set it up with the new supplier later.

 

Frequently asked questions

Absolutely not. You will continue to be supplied with electricity and gas as normal. All that will change will be who bills you for your energy.

 

Ofgem will appoint a new supplier through their ‘Supplier of Last Resort’ process. This will usually be a company that is robust enough to handle a large influx of new customers. You should hear from them within 2-3 weeks informing you they’re your new supplier.

You are not required to stay with them if you don’t want to be, but you should stick around at least until your account has been set up.

 

Unfortunately the new supplier does not have to honour the contract for fixed price energy you had with your old supplier.

Your new supplier will put you on a ‘Deemed’ contract this is usually a standard variable tariff. Once your account is set up you could discuss moving to a different tariff if you prefer. You will also be allowed to switch away to a different company if you’d like to.

Currently, until at least April 2022 the standard variable tariffs are the cheapest available on the market. You may switch to a more expensive fixed tariff if you prefer.

 

Your new supplier will usually take this over from your old one. If you prefer it’s perfectly acceptable to cancel this and set it up again later on.

If your tariff has changed you may need to re-evaluate your payment amount.

 

Yes absolutely, Prepayment customers are also protected by Ofgem and when making the decision about who will take over your supply they will look at who is able to continue supporting you on your meter type.

If you use a key and a card to top up you can keep using these until your new supplier sends out new ones to you.

If you have a smart meter you may lose the ability to top up online or through the app but you’ll still be able to make payments at a paypoint.

 

Any credit balance you had with the old supplier is protected. The new supplier is obligated to honour this. If you stay with them it’ll be added to your account, if you choose to leave you’ll be able to request a refund from them.

 

The debt will be collected by the administrator or the new supplier. You should keep records of any payments you’ve made and how much debt you think you have.

If you’re concerned about your any debt balance you should speak to one of our energy advisors.

 

Your new supplier will place you on a deemed contract. This is one you are not locked into meaning you are free to switch if you like.

It’s a good idea to wait until the transfer between suppliers have been finalised first  and the new supplier has been in touch to confirm this.

Due to current issues in the energy market the standard tariff you will be placed onto is likely to be the cheapest available. If you switch you will be placed on a tariff at the same rate unless you choose to sign up to a more expensive fixed price deal. If you’re considering this you should speak to an energy advisor first.

 

If you were switching away from the supplier that has ceased trading the switch will go through and the new supplier will issue a final bill. Ensure you take accurate meter readings on the day of the switch.

If you were switching to the now bust company your switch will process to the new company that has been appointed to take over their customers. If you’re still in your 14 day cooling off period you may be able to cancel the switch by contacting your current supplier.

 

The new supplier is not obligated to investigate any complaints from the old supplier. If your complaint is regarding your billing or payment however you may be able to take this up with the new supplier instead.

 

Suppliers of last resort are not obligated to offer the Warm Home Discount. If you have applied with your old supplier you should consider applying again with the new company if there application window is still open once your account has been set up.

Visit our Warm Home Discount page for more information on which suppliers offer the grant.

 

Speak to Cosy Kingdom

Remember, Cosy Kingdom is here to help. If you have any additional questions or would like advice tailored to your own unique situation you should get in touch to speak to one of our energy advisors.

Our energy advisors can be contacted by:

  • Calling 01592 807930
  • Texting COSY then YOUR NAME to 88440
  • Emailing info@cosykingdom.org.uk
  • Request advice online
  • On our Facebook and Twitter social media pages