Customers have been left in limbo as several energy companies have gone bust.
Households have been warned of a UK energy crisis as gas and electric prices are set to hit record high figures.
Wholesale energy prices have risen due to to their being a lack of supply after a high demand for liquefied natural gas in Asia, the weather this year has been calmer-meaning less electric powered by wind turbines and Russia limited pipeline exports to Europe.
This is not just a UK issue. In normal circumstances, Britain could use Europe's interconnectors for energy, but Europe is also feeling the pressure.
As wholesale prices shoot up, energy companies have to spend more to buy energy.
Unfortunately, this has meant smaller companies have been feeling the squeeze after signing up customers to cheap deals and ultimately losing money.
A number of energy companies have gone bust leading to customers concerned if their supplier is next.
Most recently Avro and Green Supplier are the latest who announced their closure and there is speculation they won't be the last.
What happens if your energy supplier goes bust
Essentially, you don't need to do anything. It will get sorted for you.
The difficult part is that companies can't give much warning. As soon as they find out that they can no longer trade, they have to tell their customers. This has since left customers feeling like they're limbo.
However, if your energy company goes bust, Ofgem, the UK's energy regulator, will switch you to another company and your credit will carry on over.
You will still have gas and electricity if your supplier goes bust, so you will not be left in the dark but financial guru has warned that there could be a delay and households could risk 'losing any cheap tarrif their on, instead of being moved to the price cap'.
With this, Citizens Advice Scotland has said on their website: "Don’t switch tariff or supplier until your account is moved to the new supplier. You might find it harder to get any money you’re owed if you switch before this happens"
Citizens Advice have also shared where to go for grants and benefits if you cannot pay for your heating bills. You can find that here.
Colin Mathieson, spokesperson for Advice Direct Scotland reassures people not to panic.
He said: The key message is that customers should not panic and should not immediately switch to another supplier, as a new company will be chosen by regulator Ofgem, their energy supply will continue, and customers will not lose any money owed to them.
"If you have a prepayment meter, your new supplier should tell you how you will get a replacement key or card and provide a new prepayment meter if necessary.
Mathieson added: “These firms are unlikely to be the last to collapse as small suppliers struggle with soaring gas price rises.
“Hundreds of thousands of customers will be affected, but the key advice remains the same: don’t panic. There will be no loss of supply or money owed to customers, and Ofgem will switch people to a new supplier.
“However, energy companies will be allowed to lift the price cap by as much as 12 per cent from October, so it is inevitable that many people will face higher charges down the line - and this is a worrying time for many.
“Anyone in Scotland can contact energyadvice.scot for free, impartial and practical advice by visiting www.energyadvice.scot or calling 0808 196 8660.”
There were speculations that Bulb energy could be the next to fold, but the company has said that they are not looking to the Government for a bailout.
A spokesperson from Bulb told Edinburgh Live: "The reports in the i newspaper are not true. We're not in talks with Government or Ofgem about nationalisation and we haven’t asked for a bailout.
"We buy our energy in advance and this means we're protected from the current wholesale costs that some smaller companies have struggled to manage."
What supplier will I be with if my energy company goes bust?
According to Citizens Advice, your new supplier will write to tell you when your new account has been set up. This should happen within a few weeks.
Martin Lewis has warned, the new tariff might be more expensive than your old one. But you can contact the energy company to ensure you're on the best deal for you.
You can switch if you’re not happy with your new supplier or tariff. You can do this without paying an exit fee.
What companies have gone bust?
- People's Energy
- Utility Point
- PfP Energy
- MoneyPlus Energy
- Avro Energy
- Green Supplier
