A global surge in wholesale power and gas prices has shocked the world, this could see major energy companies go bust. Many households may be looking to switch to a new energy supplier on a cheaper tariff, however, please be aware of the hidden commissions when you are using an energy broker.
What to do if your energy supplier goes bust?
If a supplier fails, Ofgem 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.
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 is the price so high?
Energy companies pay a wholesale price to buy gas and electricity, which they then sell to consumers. As in any market, this can go up or down. Prices typically rise in response to more demand for heating and people turning lights on earlier in winter. But prices have sky-rocketed due to low gas storage stocks, high European Union carbon prices, low liquefied natural gas tanker deliveries due to higher demand from Asia, less gas supply from Russia than usual, low renewable output and gas and nuclear maintenance outages.