RISING energy costs have drastically affected a number of providers in recent weeks.
Another four energy providers are announced to be at risk of going bust due to the soaring gas wholesale prices, as households grow concerned for the next step.
Only last week Utility Point and People's Energy collapsed, leaving around 570,000 customers without an energy supplier.
The rocketing gas prices, caused by post-pandemic demand, have even forced carbon dioxide (CO2) processing plants to shut, and it's thought it could hit supermarkets' meat and frozen food supplies as well.
But any energy customers affected don't need to panic.
In most cases you actually don't need to do anything at all, you won't lose any money, and you'll still be provided with energy.
An Ofgem spokesperson said: “We know that the current situation with high wholesale energy prices is putting pressure on customers and energy companies. This is a global issue.
"We have the systems and processes in place to ensure that customer needs are always met."
"Ofgem is working closely with government to manage the wider implications of the global gas price increase.”
As a result, we take a look at everything you need to know about what happens when your energy provider goes bust.
What happens if my provider goes bust?
If your current provider goes bust, Ofgem will provide you with a new supplier.
Tashema Jackson, consumer champion at energyhelpline said: "Customers need not worry as their supply will not be affected and any credit balance will be protected.
“The regulator, Ofgem, will find a new supplier for any consumers affected and automatically move them over."
So there's not much you have to do, but there are things to keep an eye on to make sure you don't lose out on any cash in the process.
Ofgem breaks it down into three simples steps that you need to take:
The regulator says the first thing you should do is take a meter reading and wait until your provider is switched over, you can cancel any direct debit if you want to as well.
You don’t need to take any action though, and your supply won’t be disrupted, so sit tight until the move is complete, Ofgem says it should only take a few days.
Ofgem's advice is to ask to be put on the new provider's cheapest tariff or move on after if you wish, they can also give you information on how they will manage your account balance, including any credit refunds.
Will my energy be cut off?
Your energy supply won’t be disrupted if your provider goes bust.
You'll also be moved onto your new tariff as soon as possible.
Your old tariff will end though and you'll be put on a new "deemed" contract which is one you haven’t chosen and can leave whenever you see fit.
Unfortunately deemed contracts can be more expensive as the supplier takes on more risk.
In some cases they have to buy extra wholesale energy at short notice for the new customers, charging more to make up for it.
If you had credit left on your account from your old supplier it'll be paid back to you during the change over – your new supplier will explain how to claim once it's been chosen for you.
If you have debts you may have to pay this back to your new supplier if they decide to take on the bust company's debts.
The decision on a new supplier will be made as soon as possible by Ofgem where it will announce the full details on its website and social media.
Should I switch supplier?
When Utility Point and People's Energy folded last week, Martin Lewis' MoneySavingExpert advised the former customers to "simply sit tight and wait to be contacted by a new supplier."
We've since learnt that is to be British Gas for People's Energy customers.
But anybody who isn't sure of where they'll be placed next, you shouldn't jump the gun by switching provider.
Customers affected will be contacted by the new supplier, which will be chosen by Ofgem, so it's best to wait until then.
Once you know who that is you can ask the new supplier to put you on their cheapest tariff.
Or after this you can shop around and then switch if there is a better option available – it's worth keeping in mind that you won’t be charged exit fees if you do this.
The new interim supplier provided for you can tell you what's next for your credit balances that you might have had with your old supplier, but you won't lose the money or credit you had on an account.
We pay for your stories!
Do you have a story for The Sun Online Money team?
Email us at [email protected]
Source: Read Full Article