More than ten British energy firms have gone bust in the past weeks, most recently Igloo Energy, Symbio Energy, and Enstroga Energy – affecting more than 1.8 million customers across the UK as a result. Citizens Advice warns people will face ‘desperate choices’ this winter after estimating an increase of £6.70 per week (about £30 a month) for customers of the five largest failed energy firms.
The Energy Price Cap set by Ofgem is set to increase by £139 for customers on standard tariffs and £153 for prepayment meters starting today (1 October).
- Low-income households will be affected the most
- What will happen to my energy bills?
- Can I stay on the same tariff with the new supplier?
- Where can I find cheaper energy deals?
- Should I switch suppliers and get a fixed deal now?
- What should I do when the new tariffs are available?
- Need help?
1. Low-income households will be affected the most
Citizen Advice finds that people with lower income will be affected most by the energy crisis, including 1.1 million households that might lose their Warm Home Discount and those who will have their Universal Credit cut off.
|Type of customer||Financial impact|
|Customers of failing energy firm who moved onto a standard tariff with a new supplier appointed by Ofgem||£6.70 worse off / week|
|Customers moved to a new supplier who lose their Warm Home Discount and face higher living costs due to inflation||£17.40 worse off / week|
|Customers moved to a new supplier who lose their Warm Home Discount and face higher living costs due to inflation, and have their Universal Credit cut||£37.40 worse off / week|
2. What will happen to my energy bills?
As of last year, customers with average energy usage who were on the lowest electricity prices were paying about £800 per annum on a variable tariff, and £817 for those on a 1-year fixed-rate plan.
Starting from today (1 October), the Energy Price Cap will increase by 12% (up to £400), meaning households paying by direct debit will face average annual bills of £1277 for dual fuel and £1309 for prepayment meter users.
The Energy Price Cap is set to be reviewed every six months, so there is a possibility the cap will go up again in springtime 2022 should the energy wholesale prices remain or continue to rise.
3. Can I stay on the same tariff with my new supplier?
In the past, new suppliers occasionally honoured customers’ old tariffs, but Ofgem has confirmed that appointed suppliers can only place their inherited customers on price-capped tariffs.
4. Where can I find cheaper energy deals?
Unfortunately, you can’t anymore. E.ON was offering £1200 1 year fixed deals last week for dual fuel, but they are all gone now.
5. Should I switch suppliers and get a fixed deal now?
Currently, all tariffs are more or less the same if not more expensive than staying on standard variable tariffs offered by the majority of suppliers. If your supplier had gone bust, it would be wise not to change energy suppliers until you have been officially transferred to your new supplier, with your credit/debit balances settled. This might save you headaches from any credit loss/ discrepancy issues. Once you are settled with the new supplier, our connection experts will be able to advise the best plans for you.
6. What should I do when the new tariffs are available?
When the new tariffs become available again, we recommend that you opt for a fixed-rate energy plan for either a 1 or 2-year term contract, as this will provide you with some certainty in terms of rates. Energy prices have continuously risen for the past 6 years, so locking in a competitive rate as soon as you can will very likely save you money in the long run.
7. Need help?
For more information on the energy crisis, help on comparing energy prices, and advice on switching energy suppliers, contact us at +44(0)8003688551 or [email protected]. Our connection experts are more than happy to help.