No need to worry – there is a proven safety net
It is exceptionally rare, but even rare things do happen occasionally. Fortunately, there are many safety nets put in place to protect your supply (it will never be cut off), and to help you securely and quickly transition to a new supplier, with zero effort on your part.
IMPORTANT: Your energy supply will not be cut off.
When suppliers go bust, affected customers are looked after by Ofgem, the UK’s energy regulator. Ofgem has solid plans in place in the event of a supplier collapsing. These plans have been proven to work well in practice – and things generally run smoothly and easily for the consumer when they are implemented.
Why are we seeing suppliers go bust? What may lead to more suppliers going bust in the future?
There are several reasons, but the ones that currently stand out the most are:
- The cost of wholesale energy has been rising rapidly, making it hard for some suppliers to compete financially.
- A government price cap has affected standard tariffs, which may have made it harder for suppliers to provide cheap deals.
- Overall market conditions (such as fierce competition and political changes) have made remaining both competitive and profitable increasingly challenging for suppliers both big and small.
The supplier market has accelerated dramatically in recent years. To give you an idea, the total number of suppliers grew by 600% from 2007 to 2017 alone. In December 2004 the UK had 13 suppliers; and as of this writing, there are over 80. That means competition is fierce.
However, this is great news for consumers like you. After all, the more competition there is in the market, the more suppliers are motivated to stand out – by offering low prices, top tier service, or both. This means there are many great deals out there just waiting to be found.
Some of the top-rated suppliers for service also offer excellent bargains – on average the saving made by switching is £300 a year. This has been proven to be true with suppliers both large and small.
How many suppliers have collapsed over the years?
It seems in the last 18 years, 16 suppliers have gone out of business.
Do you need to worry about what would happen to you if you supplier went bust?
In short – no. No matter what supplier you choose, your ability to access energy is safe. You’re lights and heating will still work, regardless of your supplier’s business concerns.
But for a boost of extra confidence, you can select a supplier with top-rated service, or even a major household name, and still find a great price.
Could my bills go up after I am switched to a new supplier?
Unfortunately, yes. However, you could potentially bring them back down again!
The new supplier you are placed on to may not be able to offer you the same rate that the old supplier did.
The old tariff you were on (and any contracts connected to it) will no longer exist should your supplier go bust.
Instead, your new supplier will give you a “deemed” contract – meaning one you haven’t chosen. The bad news is that these contracts can be more expensive. The good news is that you can exit them at any time without penalty.