In uncertain times, even energy suppliers are at risk of going out of business. Although this isn't likely, it's important to educate yourself on what to do if your energy supplier does go under. Financial difficulties, redundancies, and customers taking payment holidays, can all lead to an energy supplier going out of business.
If this, unfortunately, happens to your energy supplier, there is a process in place to ensure your energy supply is not disrupted and you're able to continue cooking, heating your home, and using hot water.
Ofgem, the Office of Gas and Electricity Markets, is an independent regulatory authority, ensuring that energy is made available to consumers for the lowest possible cost and that consumers are treated fairly by suppliers - including protecting vulnerable individuals. Although they work with the government, they are not part of the government, which means any advice that's given, is purely in the interests of the consumer.
Ofgem is also there to ensure your energy supply isn't interrupted if your supplier goes under. They do this by choosing a new supplier for you as an interim solution. Usually your existing tariff won't continue and you'll begin to pay the new tariff specified by the Ofgem chosen supplier. Depending on the supplier you're allocated, they may honour your previous tariff.
Ofgem will always try and get the best deal for you - as a regulatory body, the consumer is their main interest, not the energy suppliers.
No - Ofgem will be aware of your energy company going out of business, so will move you to a new supplier as soon as possible, but within that time period, your power won't be cut off. You should take a meter reading as soon as possible, once you're aware your energy supplier will no longer be trading. This arms you with the right information, if requested from your new supplier.
In most circumstances, it will only take a few days for a new supplier to be appointed, but you need to ensure you wait until this has happened, instead of trying to find a new supplier yourself. If you're unhappy with the new supplier's tariff, once the switch has taken place, you're more than welcome to switch energy supplier, who is more competitively priced.
Don't worry if you have a smart meter either - although your new supplier may not be able to use the smart meter you were provided with, they will still take regular meter readings to ensure your energy usage is being measured accurately. Once you're settled in with your new supplier, or you choose to switch to another one, your smart meter will work again in the future.
If you're on a prepayment meter, any credit you have already for your energy supply will be protected by Ofgem and can transfer with you to the new supplier. Your new supplier will then provide you with the details on how to add more credit to your meter, if necessary.
You don't need to worry about this - simply leave everything to Ofgem, that's what they're there for. If you have any outstanding credit or debt, this will be sorted through the new supplier that Ofgem allocates to you.
If you do have credit, this will transfer to your new supplier and you'll be paid back what you're owed. If you owe money, again, this will come with you to your new supplier and a payment plan can be discussed in order to reduce this debt. However, some suppliers may not arrange to take on your previous supplier's debt, which means you may still have to pay this back to your old supplier. If this situation occurs, everything will be explained to you by your new supplier.
If you've already cancelled your direct debits, fear not. Your newly appointed Ofgem supplier will contact you directly and get you set up on their accounts system, so you don't have a break in your energy supply.