Several gas and electricity providers have stopped trading last week, and more could follow by the end of the year. This is what to do if you are one of the customers affected
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Consumer worries about energy suppliers are running high after several firms ceased trading and more are set to follow due to sky-rocketing wholesale prices.
Today small gas and electricity provider Bulb announced it was in crisis talks over its future. Last week energy suppliers Utility Point and People’s Energy ceased trading in a move that affected half a million customers in the UK.
But the good news is if your energy company does go out of business you should be protected – we break down all of your rights below.
Have you been affected by energy firms going bust? Message firstname.lastname@example.org
What to do if your energy supplier stops trading
Understandably consumers get worried when their energy company runs into serious issues – especially if it is holding onto any of their cash.
They want to know what happens next, if their energy will get cut off and if they can get refunds.
In short, customers will not be out of pocket if their energy firm does go under – though they can be severely inconvenienced.
This is because of the energy regulator, Ofgem, which steps in to protect consumers.
If your supplier does go bust, Ofgem recommends customers:
1) Take a meter reading, but don’t switch immediately
2) Wait for Ofgem to swap you to a new provider
3) Ask for the best deal when the provider contacts you
Ofgem normally finds a new energy provider for customers of failed firms within a few days.
It also guarantees any credit your old energy firm had when it went down will be returned to you.
However, just because you’re moved to a new energy supplier doesn’t mean it is as good a price as you had with your old firm.
You do not have to accept the new provider just because they contact you. If the deal looks pricey you are still free to shop around for a new one.
But remember that energy prices are going up generally, and deals are not as cheap as they once were.
Households will face another energy price rise of £280 next year following a 60% surge in wholesale gas and electricity prices, experts have warned.
The cost of gas – which fuels many UK power stations – is rising sharply due to higher demand, a move that is likely to hit the next energy price cap.
Wholesale energy prices have surged to 11 times normal levels – a record high – in the past fortnight, following a surge in gas demand, low wind speeds and power station closures.
The UK was even forced to fire up two old coal power plants to help guarantee electricity supplies this week.
The leap in costs in recent months has already led to regulator Ofgem increasing its price cap for standard tariff and other default deals by £139 a year from October 1.
The typical gas and electricity customer is likely to see their bill go up by £139 to £1,277 a year from next month.
The price cap limits the amount that companies can charge customers on standard variable tariffs.