With energy prices set to rise and the news that two firms, Utility Point and People’s Energy, have collapsed, many of us face a winter of worry. So if the worst happens and your energy supplier goes bust, what actually happens? Let’s take a look.
[top_pitch]
Will you be cut off if your energy supplier goes bust?
No. If your energy supplier goes bust, you won’t be cut off. In fact, there shouldn’t be any disruption and you might not even be aware of anything changing. Instead, industry regulator Ofgem will transfer you to a new energy supplier.
What should you do if your energy supplier collapses?
If your energy provider stops trading, you don’t technically have to do anything. You’ll be allocated a new supplier in time.
However, it’s a good idea to take a meter reading (a photo of your meter with the reading in view is even better). Doing this will make it easier to see what you owe when you get a new supplier.
Ofgem also advises that you shouldn’t switch straight away if your current supplier goes bust.
What happens when your energy supplier ceases to trade?
The first thing that will happen is that Ofgem will ask other suppliers to bid for your business. They’ll then choose a new supplier who they think can best serve consumers.
It’s highly likely that when your custom is transferred, you’ll be put on a ‘deemed contract’ which is essentially a default tariff. The whole process should take just a few days.
Once a new supplier has been chosen, they’ll contact you and you’ll be able to discuss:
- Alternative, cheaper tariffs.
- Any credit you had with your old supplier – your new supplier should pay back what you’re owed or credit your new account.
- What happens with any outstanding debts. If your new supplier has taken on customer debts, you’ll need to pay them what you owe. However, if they haven’t, you’ll have to keep paying back your old supplier (or their administrators).
- What to do with any Direct Debits that are set up for your account. If you have outstanding payments, these may still be taken as usual via Direct Debit until your bill is paid off.
If you’ve spoken to your new supplier and then decide you want to switch to a better deal with another supplier, you can.
What if you’re in the middle of switching energy supplier?
If you’re already in the process of switching, it should go ahead as planned and you don’t need to do anything. Of course, if you’re concerned, you can contact the supplier you’re switching to and check with them for reassurance.
What happens to your smart meter?
This will depend on whether it’s compatible with your new supplier’s systems and processes. If it is, you should be able to carry on using it. If not, you’ll probably have to do things the ‘old school’ way and take meter readings instead.
[middle_pitch]
What about business energy customers?
The same applies to business energy customers. The only difference is that Ofgem doesn’t guarantee you’ll get back any credit on your energy account. In other words, you could lose this money. However, Ofgem does say it will always try to find suppliers that are willing to honour business accounts in credit.
If that isn’t possible, you can chase for credit owed to you through the administrators handling your old supplier’s liquidation.
How can you keep energy bills down?
Shopping around and comparing tariffs really is the best and quickest way to get the best energy deals. But if you’re worried about rising energy prices and want other ways to cut costs, take a look at these practical tips to keep bills down.
The post What happens if your energy supplier goes bust? appeared first on The Motley Fool UK.
5 Stocks For Trying To Build Wealth After 50
Markets around the world are reeling from the coronavirus pandemic…
And with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.
But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be daunting prospect during such unprecedented times.
Fortunately, The Motley Fool is here to help: our UK Chief Investment Officer and his analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global lock-down…
You see, here at The Motley Fool we don’t believe “over-trading” is the right path to financial freedom in retirement; instead, we advocate buying and holding (for AT LEAST three to five years) 15 or more quality companies, with shareholder-focused management teams at the helm.
That’s why we’re sharing the names of all five of these companies in a special investing report that you can download today for FREE. If you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio, and that you can consider building a position in all five right away.
Click here to claim your free copy of this special investing report now!
More reading
