Unless you have been living on Mars for the last few months, then you will be aware of the rapidly-rising cost of energy. This swift rise in the price of fuel has meant that petrol and diesel prices have risen way above the rate of inflation over the last 6 months, and more recently the price of domestic energy to heat our homes (gas and electricity) has also risen sharply.
According to some sources, this will result in several small UK energy companies going out of business altogether because of the soaring wholesale prices of energy, especially gas. These wholesale price rises have left some companies unable to provide their customers with the energy they have paid for.
Government rules state that supplies of energy will continue for any customer whose current supplier goes out of business. The new company taking over the supply will become responsible for taking on any credit balances the customer has. But paying that credit to new customers might prove to be a disincentive for the larger companies to take on new business in the first place!
What should you do if your energy supplier goes out of business?
According to Citizens Advice customers will still continue to receive gas or electricity even if the energy supplier goes bust. Ofgem will move your account to a new supplier but it might take a few weeks for this to happen. Your new supplier will then contact you to explain your new arrangements. Citizens Advice suggest that customers take the following actions:
1. While you wait to hear from your new supplier, check your current balance and (if possible) download any bills and take a photo of your meter readings.
2. If you pay by direct debit, there is no need to cancel it straight away. Wait until your new account is set up before you cancel your old direct debit.
3. If you are in credit on your account, your money is protected and you'll be paid back. If you were in debt to the old supplier, you'll still have to pay the money back. The new supplier will contact you to arrange a payment plan.
4. Once you have been informed of your new supplier, make sure you're on their best tariff. You can switch suppliers if you're not happy with your new tariff without any penalties, but don't do this until the account has been moved over.
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