What to do if your energy supplier goes bust – and if you should switch company before it happens

As the energy crisis continues, it has emerged that nearly 1.5 million customers have been left stranded in just two weeks after suppliers collapsed.

On Wednesday, Avro Energy and Green cased trading, leaving 830,000 combined customers facing being switched to new, potentially more costly, providers.

It follows a number of other small energy firms going bust this month as a result of spiking wholesale gas prices.

All affected customers will still receive energy while a new supplier is appointed by government regulator Ofgem.

But with those who were on fixed rate deals likely to end up paying more when they are moved, many may be wondering if they should take matters into their own hands.

If my energy provider collapses, should I wait for Ofgem to move me to a new one?

If your firm does go bust, your supply will stay on and any outstanding credit you have is protected.

Ofgem his urging those customers to wait until they’ve been contacted by a “supplier of last resort” – or the new supplier it appoints you with – so that any credit balances can be resolved before you transfer.

It’s also advisable to take a photo of your meter reading as soon as possible to give to the new supplier.

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“When your new supplier is appointed, you’ll likely be moved across to a new variable deal that will cost more than you have been paying, but you won’t pay more than the energy price cap,” said Gary Caffell, the utilities editor at MoneySavingExpert.

“You can do an energy an energy comparison to check you are on the best deal, but as there are so few deals around now, it’s unlikely you’ll be able to save by switching.”

Should I switch before my provider goes bust?

With experts warning of a tsunami of small energy firm collapses without government intervention, customers may be eyeing up bigger firms.

But with the lack of cheap deals around, if you’re on an economical tariff it may be worth sticking with your current provider in the meantime.

Despite business secretary Kwasi Kwarteng stressing just a few days ago that the Government would “not be bailing out failed companies“, it’s understood that it is now considering a rescue package.

How will the energy price cap affect stranded customers?

With Ofgem’s price cap set to rise by 12 per cent to £1,277 a year on 1 October, those who were on fixed-rate deals will see their bills rise.

The cap applies to those on standard variable tariffs but your bill could be higher than the maximum amount if your electricity and gas usage is higher than the average person.

For households using prepayment, or pay-as-you-go meters, the cap will rise to £1,309 a year.

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