London Daily

Focus on the big picture.
Thursday, Jul 31, 2025

Energy crisis: What do you do if your energy supplier goes bust - and which companies have already folded?

Energy crisis: What do you do if your energy supplier goes bust - and which companies have already folded?

Wholesale prices for gas have surged 250% since January, with a number of smaller firms entering insolvency - here is what to do if your energy firms goes bust.

More than a million people have now been affected by energy suppliers going bust after the price of buying gas on wholesale markets surged.

The rising costs are putting pressure on the suppliers - particularly smaller companies who are unable to pass on the increases to their customers - and households who face increased bills this winter.

Six firms already folded in September - PfP Energy, MoneyPlus Energy, Utility Point, People's Energy, Green, Avro Energy - and there are fears that more could follow, with Bulb and Igloo reportedly on the brink of collapse.

There are now roughly 40 suppliers in the UK market, sharply down from a peak of 70 in 2018.

Some of the UK's biggest energy companies could be offered state-backed loans in return for taking on customers from smaller suppliers.

However, Business Secretary Kwasi Kwarteng has repeatedly said he does not want to prop up companies that have been badly run, adding there is "no reward for failure".

Are you a customer of a small energy supplier and worried about keeping warm through the winter? Email us at news@sky.com

Below are answers to some of the key questions coming out of the crisis:

What if your supplier goes bust?


If a supplier fails, Ofgem - the UK's independent energy regulator - will ensure customers' gas and electricity supply continues uninterrupted.

Customers will be switched to a "supplier of last resort" and any credit with the old supplier will be transferred.

If a supplier of last resort is not possible, a special administrator would be appointed by Ofgem and the government.

Your old tariff will end and the new supplier will put you on a special "deemed" contract, which will last for as long as you want it to.

The deemed contract could cost you more, as the new supplier takes on more risk (for example, possibly having to buy extra wholesale energy at short notice to supply to the new customers), but Ofgem says it will try to get the best deal for you.

Boris Johnson has pledged his government will 'do everything we can' to prevent energy companies going under as wholesale gas prices surge in the UK. File pic


You should take meter readings as you will need to pass these on to your new supplier.

Once your new supplier has been in touch, ask them to put you on their cheapest deal. Then shop around and switch if you want to. You won't be charged exit fees.

Why have gas prices risen so dramatically?


As in any market, the whole price of gas can go up and down - and costs typically do rise at this time of year, with an increased demand for heating and people switching on lights earlier in the day.

However, this year it coincides with the economy opening up from pandemic lows, so demand is even higher.

A perfect storm of other problems has also hit the sector: supply from Russia has dried up recently, demand is high in Asia and in the UK several gas platforms in the North Sea have closed to perform maintenance that was paused during the pandemic.

British Gas stepped in to operate People's Energy's supply after the company folded last week.


Will my energy bill rise?


It depends on what kind of deal you are on.

If you are on a fixed-price tariff, it means the price you pay is fixed for the length of your contract, so you won't be affected - but you will probably have to switch to a more expensive deal when your contract comes to an end.

If you are on a flexible tariff, this changes in line with wholesale prices.

The rise announced late last year, which came into effect in October, means that nobody covered by the price cap will see their bills rise by more than 12% before the next review, which is due to take place in April.

Ofgem has said consumers can expect an average price rise of £135 this winter.

Why are energy suppliers going bust?


Many smaller suppliers promised to sell gas to customers for less than it is now costing them to buy.

When people sign a fixed-term deal, the energy suppliers expect the price of gas to go up and down, which gives them some room for price changes.

But the unprecedented rise in global prices means a lot of customers are now paying less for energy than costs the supplier to buy, which is not a viable business strategy.

What is hedging and why have so many energy suppliers not done it?


The energy suppliers that stay afloat are likely to be those that have hedged - a type of insurance which steps in if prices rise too much.

But like all insurance, hedging costs money. So many suppliers - who are living on razor-thin margins anyway - decide not to and are now paying the price.

Some analysts fear the UK's energy companies could be drastically reduced over the coming months. File pic


How long could this last?


Europe's winter heating season typically begins in October and wholesale prices are not forecast to fall significantly during the remainder of this year.

Newsletter

Related Articles

0:00
0:00
Close
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
×