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 rose rapidly during 2018 and early 2019 putting suppliers under big cost pressure
- The government price cap means suppliers are making less profit than before from their super loyal customers
- There are around sixty energy suppliers fighting over the UK’s 27 million homes creating a fiercely competitive market
In December 2004 the UK had 13 energy suppliers; it rose to a peak of 70 in 2018.
However, lots of suppliers is great news for consumers. After all, the more competition there is, the more suppliers are motivated to stand out – by offering low prices, environmental tariffs, top tier service, or all of these. This means that there are loads of great deals out there just waiting to be unearthed.
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?
Nine collapsed in 2018 and another nine in 2019. Before 2018 only a handful went bust over fifteen years.
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.
If my supplier goes bust, could my bills rise?
Yes, this is very likely. However, you can bring them back down again in minutes
The new supplier you are placed with normally puts you on an expensive standard tariff.
The old tariff you were on (and any contracts connected to it) will no longer exist should your supplier go bust.
If you’d like to save on your energy bills compare and switch at eneryghelpline
Post written by Victoria Arrington and edited by Mark Todd.