What to do when your energy provider goes bust?

So far in 2021, 24 energy companies have ceased trading and it seems that more may follow due to skyrocketing prices. It might not have ever happened to you... until it does.

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Finding out that your energy supplier has suddenly gone bust might be a shortcut to panic mode but don't worry, in this blog post we'll walk you through what to do, what to expect and how to prepare for this situation.

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1. What to do when you find out

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You will still receive gas and electricity so you usually won't need to do anything until your new supplier contacts you directly.

One thing that you might want to do is note down your meter reading and check online for your account balance for reference.

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Here are some important things to remember:

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Do not switch tariffs or providers until your account has been moved to a new provider and they contact you. If you do so, you might find it harder to get back any money you're owed.

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If you have a direct debit set up, do not cancel it as you will still be billed normally and it will automatically be transferred to the new supplier.

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Avoid calling support unless you're in a vulnerable situation or struggling to pay your bills when they're due. This is to ensure those who need the help can get it. For example, in their blog about going into administration, Bulb advises other ways to contact them here and to use the Bulb app to manage your account.

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If you have a smart meter, you won't need to do anything special if your new appointed provider operates smart meters as well. However, if your new energy supplier doesn't operate smart meters, your meter will still work, but won't automatically send readings. You'll need to submit your meter readings as you would with a "traditional meter". Alternatively, switch to a provider that does operate with smart meters.

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If you have a prepayment meter, you should be able to top up as usual and your energy supply will not be disrupted. Contact Citizens Advice if you're having issues: call 0808 223 1133 or use their online webchat.

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2. What to expect

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Ofgem appoints a new supplier

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You won't need to transfer to a new provider yourself as Ofgem (the UK regulator for gas and energy markets) will appoint a new supplier within a few days and move your account for you. Any balance or credit you have will also be protected.

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However, even though there is a competitive process to hopefully get the best deal, it means that you don't have control over who you end up with. If you're unhappy with the tariff or provider, you can switch once the new supplier has been set up. You won't be charged any exit fees.

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An administrator is appointed to run your supplier

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Sometimes, Ofgem and the government appoints an administrator to run the supplier which has gone bust. As with the above, your supply will not be affected. The administrator may look to transfer customers to another supplier or try to rescue it.

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If this does happen, you don't need to do anything and don't cancel your direct debit. You can look for a better deal or switch suppliers if you want. If the administrator closes the supplier down or transfers you to a different supplier, they'll contact you to let you know beforehand.

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3. How to switch energy suppliers

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NB: DO NOT switch providers before your new supplier has contacted you.

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So, you've been moved to a new supplier by Ofgem and they've contacted you or your supplier is being run by an administrator and now you want to switch.

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Here are our best tips for switching:

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Make sure that you've been contacted by the new supplier to ensure that the transfer has been processed on the energy industry systems.
Use a service like MoneySupermarket to find the best deal for you and your specific usage.
Consider how good a supplier's customer service is so that you're not left hanging if you have issues or questions.

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4. How to prepare for an energy supplier going bust

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As with any regular expense, preparing for any change in circumstances is essential, like your supplier going bust.

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Even though you shouldn't need to change how you pay your bills, here are important to consider for regular expenses.

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Have an emergency fund: Set aside a set amount of money regularly so that your emergency fund will be built up steadily for when you need to use it. The general advice is to have at least 3 months' worth of living expenses saved for emergencies.

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Be aware of your spending: Once you've set a predictable amount going into your emergency funds, bills and other regular expenses, you can get a better picture of your spending overall. This will enable you to plan ahead for the future.

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Use apps to help you keep track of your money and bills: You can take advantage of apps like Roqqett, which automatically summarises your spending into bite-sized pieces of information and gives you an overview of all your accounts. You can also see all of your spending categories clearly which helps with budgeting effectively.

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In summary...

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Don't panic because you won't need to switch suppliers yourself, you'll be moved to a new provider by Ofgem.
Shop around for the best deals if you're not satisfied with your new provider.
Take advantage of apps like Roqqett to get more control of your finances and prepare for changes in circumstances.

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