Do you know what to do when your energy supplier goes bust? Here is everything you need to know when that happens.

Energy market in the past few years

Over the past few years, the UK's energy market has experienced significant turbulence, leading to skyrocketing bills and numerous energy suppliers' collapse.

Sharp increases in wholesale gas and electricity prices have squeezed suppliers' margins, especially for those without sufficient hedging strategies. Since 2016, over 100 energy suppliers in the UK have gone bust, impacting both domestic and business customers.

In 2021 alone, 28 suppliers ceased trading due to soaring wholesale energy prices, displacing over 4 million customers, who then needed to be transferred to other suppliers. These suppliers include:

What happens when a supplier goes bust?

When your energy supplier goes bust, Ofgem, the UK's energy regulator, will appoint a new supplier to take over your supply, and your energy supply (gas and electricity) will not be interrupted. You don't have to do anything, and your new supplier will reach out with the information you need.

Your energy supply will continue

If your energy supplier goes bust, your gas and electricity supply will not be interrupted.

Ofgem will appoint an SoLR supplier

To protect customers, Ofgem has established the Supplier of Last Resort (SoLR) protocol in 2003. This means that when a supplier fails, their customers are usually transferred to another supplier, often one of the "Big Six" (British Gas, EDF Energy, E. ON, Npower, Scottish Power, and SSE).

You will hear from your new supplier

Your new supplier will contact you to inform you about the transition/takeover and provide information about your new tariff. You will receive instructions from your SoLR supplier about switching, so it's best to wait for them to contact you once the transition is in place.

What happens to your energy tariff when a supplier goes bust

You'll be placed on a variable tariff

An SoLR supplier usually places its new customers on a "deemed contract", a temporary, standard variable tariff, with prices capped by the Energy Price Cap.

If you were previously on a fixed tariff with your supplier, you will pay the agreed price on your contract for the time being. Your contract will end when you are officially moved to the SoLR. You may be then paying more, depending on what the price cap levels are at during your transition.

You will remain on this contract for a maximum of six months, or until you agree on a new fixed tariff with your SoLR supplier, or if you switch to a new energy provider.

Your account credit and balance

Your credits or balances with the failed supplier will be protected and transferred to the new supplier once the transition is complete.

Switching to a new supplier

Once the transition is complete, you will be able to switch from a standard variable tariff to a fixed tariff - from your SoLR supplier or a new supplier that you prefer.

What you should do if your supplier goes bust

Here are a few things you can do when your supplier goes bust:

Do not worry

Your energy supply will continue without disruption, and Ofgem will take care of looking for a new supplier.

Take meter readings

Before your new supplier reaches out to you, it's a good idea to take meter readings for your gas and electricity to make sure your final bill with the old supplier is accurate.

Do not cancel direct debits

Continue with your current payment arrangements unless advised otherwise by your new SoLR supplier.

Shop around for a better tariff

Once your new supplier has contacted you, you can have a look around to find the best tariff for you, and switch to a different supplier if you prefer - you will not be charged any exit fees.

Moving into/out of a home with a failed energy supplier

If you've just moved into or out of a home at this time, where the original energy supplier has gone bust, but a Supplier of Last Resort (SoLR) has not been appointed, the energy account will still be in the name of the old tenant. Here's what will happen:

Your will have energy supply

Even though the original supplier at the property has gone bust, your energy at the property will continue as normal.

Billing & responsibility

Since the account is under the previous tenant's name, they won't be able to close their account until the transition is complete. You won't be responsible for any charges until you formally take over the property. However, this doesn't mean the previous tenant will pay for your energy bill.

You are responsible for the energy used from the day you move in until the day you move out, so when a new SoLR applier is appointed, they will likely bakdate your account to the day you moved in based on your meter readings. If no readings are taken, your supplier will estimate usage from when you took over the property.

What you should do as a tenant

If you're moving into a home with a failed supplier or moving out of one, here are a few things you should do:

• Take meter readings the day you move in/ move out

• Wait for the SoLR appointment

• Contact the appointed supplier as soon as possible to take over the account/ close your account at the property

Find more information about SoLR

You can find more information about Ofgem's SoLR process and developments regarding Rebel Energy's transition here:

• Ofgem: Ofgem protects customers of Rebel Energy

• Energy Ombudsman: Supplier of Last Resort (SoLR)