Ofgem safety net: If your energy supplier goes out of business

Mae’r dudalen yma ar gael yn Gymraeg.

It’s unlikely that your supplier will go out of business. If it does, Ofgem's safety net will make sure you’ll always have an energy supply, and will feel as little change as possible.

This guide will answer some of your questions.

Your supply

Will my supply be cut off?

No. We’ll move you to a new supplier. Your energy supply won’t be cut off or even disrupted. In fact, you won’t notice any change. 

Our advice is to take a meter reading and not to do anything until we have appointed a new supplier and they have been in touch with you.  For advice on how to read your meter, see: Understand your energy meter.

Who will choose my new supplier?

Ofgem chooses the new supplier.

When will I know who the new supplier is and the date I'll be switched to them?

We’ll make a decision on a new supplier as soon as possible and will announce these details on our website.

We’ll try and get the best possible deal for you. To help best protect your interests, we’ll run a competitive tender process to appoint the new supplier. After we’ve chosen them, you will be moved onto a new contract with the new supplier. This process should only take a few days.

Your contract

Will I be on a different contract with my new supplier?

Yes. Your old tariff will end.

Instead, your new supplier will put you onto a special ‘deemed’ contract (this means a contract you haven’t chosen). This contract will last for as long as you want it to.

Will my bills go up?

Your new supplier will put you onto a special ‘deemed’ contract (this means a contract you haven’t chosen). This contract will last for as long as you want it to.

Your bills may go up, as ‘deemed’ contracts can be more expensive. But Ofgem try to get the best possible deal for you, if you’re in this situation.

Why could 'deemed' contracts cost more?

‘Deemed’ contracts can be more expensive. The supplier takes on more risk, as customers are moved to a new supplier quickly without the usual background credit checks. So, they also charge more to make up for this extra risk.

What rate will I pay under my new contract?

Your new supplier will put you onto a special ‘deemed’ contract (this means a contract you haven’t chosen). This contract will last for as long as you want it to.

Your new supplier will tell you what the new 'deemed' rate will be. It will take effect when we announce who the new supplier is. We aim to make a decision on the new supplier as soon as possible and when choosing a new supplier, we try to get the best possible deal for you. 

Once you have been contacted by your new supplier you should ask them to put you on their cheapest deal or shop around for a cheaper supplier. You won’t be charged exit fees.

For clear advice on how to do this visit Ofgem's energy guide at Be An Energy Shopper (opens another website).

Switching supplier

Should I switch supplier now?

No. Our advice is not to switch immediately, but wait until your new supplier has got in touch with you. They can then tell you what to do about any credit balances you might have had with your old supplier.

Once you have been contacted by your new supplier you should then ask them to put you on their cheapest deal or shop around for a cheaper supplier. You won’t be charged exit fees.

For clear advice on how to do this visit Ofgem's energy guide at Be An Energy Shopper (opens another website).

I’m already in the process of switching supplier and it’s not yet complete. Will my switch go through and is my credit balance protected?

You don’t need to worry. If it’s already in process, you will continue to be moved to the new supplier you have chosen. You don’t need to do anything.

When your switch completes and the account with your old supplier is closed, you may be owed money if your account had built up credit with the old supplier. We'll look to appoint a supplier who will pay back money owed to you that's outstanding from a closed account. 

Accounts in debt or credit

I’m in credit to my old supplier. Will I get this money back?

Your new supplier will pay back the outstanding credit you may have.

Once we have appointed the new supplier, they will contact you to explain how this will work. They may, for example, automatically credit money to your new account with them.

Our advice is to take a meter reading and a note of the balance if you know it, and to wait for them to get in touch with you.  

What about businesses?

Ofgem’s safety net protects all customers' energy supplies, and all customers will be transferred to a new supplier.  Business customers' credit balances are not protected under the safety net. Business customers should contact the company administrating the insolvency to ask them what to do about their credit balances. 

I’m paying back debt to my old supplier. Will I still pay this to my new supplier?

This depends on what your new supplier agrees with your old supplier’s administrators.

You will need to pay back the debt to your new supplier if they arrange to take on customer debts to your old supplier.

You will not need to pay back the debt to your new supplier if they don’t make this arrangement. However, you may have to continue to pay it back to your old supplier or their administrator.

Once we have appointed the new supplier, they will explain how things will work in practice. 

I recently closed my account. Will I get back the credit I’m owed?

We’ll look to appoint a new supplier who will pay back money due to customers that's outstanding from closed accounts.

Payments through direct debit

Should I cancel my direct debit?

No, you don't need to worry about cancelling your direct debit:

  • If you are in credit - your old supplier won't take any direct debit payments from you.
  • If you are in debt and owe money to your old supplier - your direct debit payments to them will be taken as normal.

Our advice is to wait until your new supplier has got in touch with you. They will help you set up a new account and will be able to tell you what will happen with any credit balance you may have with your old supplier.

What should I do if I’ve already cancelled my direct debit?

You don't need to worry if you’ve already cancelled your direct debit. Wait until your new supplier has got in touch with you. They will help you set up a new account and will be able to tell you what will happen with any credit balance you may have with your old supplier.

Complaints and contacts

I had made a complaint to my old supplier and I’m still waiting for it to be resolved. What happens now?

If you had made a complaint to your old supplier and it had not yet been resolved, you will need to raise the issue again with the new supplier once we have chosen them. This includes, for example, complaints you may have previously made on your account balance.

The new supplier will review if the complaint is still relevant now you have transferred to them, or if it can be closed.

For more on the complaints process and how to make a complaint, see: Complain about your gas or electricity bill or supplier.

How will I be contacted if i'm moving home?

Your supplier or their appointed administrator will contact you at your old home address. You may want to consider redirecting your post if this affects you.

I'm not sure who my supplier is

You can find out who your gas or electricity supplier is and their contact details on a recent energy bill.

If you don't have this to hand, or if you've just moved home and aren't sure which utility company supplies your new property, see Who is my gas or electricity supplier? 

Further help and advice

If your question isn’t answered here and you have concerns about your energy supply, problems or complaints, you should contact the Citizens Advice consumer helpline in the first instance for guidance and support.

Ofgem's role

You can read more about our powers to protect consumers when suppliers go out of business in our guidance: Supplier of Last Resort process.

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  • Published: 29th Nov 2016
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