The UK is in the midst of an energy crisis, with wholesale prices up 250% since the start of the year. Because of this, a number of energy firms have already pulled the plug. So has your energy supplier ceased trading? And what can you do to protect your bills? Here’s everything you need to know.
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Which energy firms have gone bust?
A number of energy firms have collapsed in 2021. Simplicity Energy and Green Network Energy both went bust in January, and Hub Energy folded in August.
In addition to these collapses, the recent energy crisis has sent a host of other energy firms to the wall over the past month. They include:
- Avro Energy
- Green
- PFP Energy
- MoneyPlus Energy
- Utility Point
- People’s Energy
Is your energy supplier listed above? If so, the good news is that you won’t lose access to gas or electricity. Your supply will carry on as normal.
That’s because Ofgem, the independent energy regulator, will switch you to a new supplier automatically. However, if you were previously on a cheap tariff, it’s very likely your bills will rise.
How can I protect myself if my energy supplier collapses?
Sadly, more energy suppliers could collapse over the next few months. Some industry experts are even suggesting that as many as 60 firms could exit the market in 2021. This would reduce the total number of suppliers to just 10.
If your energy supplier goes bust, you may find that being transferred to an alternative supplier takes time. You may also find it impossible to submit an updated meter reading, as your supplier’s website may go offline as soon as it ceases trading.
To avoid the risk of being overcharged, here are two actions you can take right now:
1. Take a screenshot of your online energy account
This will mean you have some evidence of your energy usage. That way, your new supplier can’t claim that you’ve used more energy than you actually have. If you have trouble taking a screenshot on your device, then a simple photo can also do the trick.
2. Submit a meter reading NOW
If you don’t have a smart meter, then it’s a good idea to take regular meter readings. The best way is to take a photograph of your meter that clearly shows the reading. Then, if your supplier goes bust, you’ll be able to supply an accurate reading, reducing the likelihood that you’ll be overcharged once your new provider takes over.
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Energy supplier crisis: What else do I need to know?
It’s an unavoidable fact that rocketing wholesale prices mean that for many, energy bills are now going through the roof.
Whether or not your energy supplier has gone bust, you can reduce the impact on your wallet by shopping around for the cheapest tariff. Remember that if your energy supplier has ceased trading, you are under no obligation to stick with the new provider imposed on you.
If you do choose to move to a new energy supplier, it’s worth considering whether you want a fixed or variable tariff. A fixed tariff means the unit cost of energy is fixed, giving you protection against further rises. However, if you opt for a variable tariff, then you’ll be at risk of further price rises, but you could benefit if the current high prices drop.
Aside from switching your energy supplier, it’s also a good idea to take practical steps to reduce your energy consumption. See our article on how to keep your energy costs down for more.
What’s behind the energy supplier crisis?
One of the main reasons why so many energy suppliers are going to the wall is that many customers are on fixed tariffs. This means the suppliers are unable to raise prices. As a result of the unprecedented rise in the cost of wholesale energy, some energy suppliers have been obligated to sell energy at a loss.
Additionally, Ofgem’s energy price cap, which recently went up, limits how much providers can raise prices for those on variable tariffs.
Another thing to bear in mind about the energy suppliers that have gone bust is that they are unlikely to have taken out insurance against huge increases in the cost of wholesale energy. Major energy suppliers have this insurance in place, protecting them – and their customers – from sudden price changes.
To learn more, see our article that covers why energy prices are increasing so much.
