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What happens if my energy company goes bust?

What happens if my energy company goes bust?

Competition in the UK energy market may be high, and new suppliers joining the market has undoubtedly helped increase competition, but the number of energy companies going out of business is also high.  
If the worst happens and your supplier goes out of business, the Ofgem safety net will make sure you don’t lose your supply, or your money. 
Here are some answers to the most pressing questions you may have if your energy company goes bust.

Peter Earl
From the Energy team
minute read
posted 10 FEBRUARY 2020

Why are energy companies going bust?

Eight smaller energy companies went out of business in 2019. Commentators put the failures down to a mix of reasons, including a crowded market, high wholesale costs and a lower energy price cap.

What is the Ofgem ‘safety net’?

Ofgem, the UK Government-backed National Regulatory Authority for Gas and Electricity Markets, has put in place a safety net to protect customers if their energy company goes out of business.

If your energy company goes bust, the Ofgem safety net will immediately kick in to ensure you have a continuous energy supply, and as little disruption as possible.

Will I be cut off if my supplier goes bust?

No, you don’t need to worry about being cut off if your energy supplier goes bust. Under the Ofgem safety net process, you’ll be moved to a new supplier, with no disruption to your supply of electricity or gas.

Who will my new supplier be?

Your new energy provider will be chosen by Ofgem on your behalf. This is known as a ‘Supplier of Last Resort’ (SoLR).

Once your new supplier has been chosen, they will contact you with details of your new contract.

What happens if my old account was in credit or debt?

Your new supplier will take into account any outstanding credit you may have. They will contact you and let you know how it will be paid back.  
In most cases, the credit will be added to your new account, with a deduction for energy costs you haven’t yet been billed for.  
Any money you still owe to your old supplier (account debt) will most likely be transferred to your new account. If your SoLR hasn’t arranged for this, you’ll still be in debt to your old supplier.  
Either way, you’ll still need to pay back what you owe.

Will I be on the same tariff as my old supplier?

No, you won’t be on the same tariff as your old supplier. You’ll be put on a new contract. This is known as a ‘deemed contract’ which means you didn’t choose it.

Deemed contracts can be more expensive, so you may find it’s better to shop around and find a better tariff elsewhere. However, Ofgem recommends that you only do this, once you’ve successfully moved over to your deemed contract, so as not to confuse the process.

If I’m not happy with my new energy supplier, can I switch?

You can switch if you’re not happy with your new SoLR energy supplier. In fact, this would be the perfect time to shop around for a cheaper tariff.

Ofgem advises customers to wait until you’ve successfully moved over to the appointed supplier, before starting the switch process to any alternative supplier. This usually only takes a few days.

If you decide to switch energy suppliers after the SoLR process is complete, you won’t be charged an exit fee, so you won’t be locked into a contract you didn’t choose.

And thanks to the Government-backed Energy Switch Guarantee, the whole switching process is simple and quick.

Which domestic energy suppliers have gone bust?

The table lists UK domestic energy companies that went bust in 2019.

Supplier (SORL) Exit month New supplier
Economy Energy January OVO Energy
Our power January Utilita
Brilliant Energy March SSE
Cardiff Energy August SSE
Solarplicity August EDF
Eversmart Energy September Utilita
TOTO Energy October EDF
Breeze Energy December British Gas

Where can I compare energy suppliers?

You can compare energy suppliers with us here at Compare the Market. Our simple comparison tool makes it easy to compare tariffs and choose one that suits you.

Customers who decide to switch could save up to £329** per year on their energy bill. So why not compare energy with us today and see if you can save.

**Where a saving can be achieved 50% of people could achieve a saving of £329.00 on their dual fuel energy costs based on Compare the Market data in November 2019.

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