UK energy suppliers have been hit by a substantial 250% increase in the price they pay for gas since the beginning to the year, subsequently posing the risk that many suppliers will go bust, whilst others will likely raise the price of their tariffs.
Why are my bills increasing so much?
Approximately 15 million households across the UK will be hit with a 12% rise in their energy bills from October.
The reason for this is due to a new higher energy cap which will come into force next month. The energy cap is reviewed and readjusted biannually by the energy regulator Ofgem, and it is the maximum price suppliers can charge customers on a standard or default tariff.
Given the current turmoil in the energy market, you should expect suppliers to raise their prices to the newly set maximum caps, or worse, go bust.
What will the new prices look like?
Standard Tariffs Are increasing in annual price by £139, from £1,138 to £1,277.
Pre-Payments Should expect an increase from £1,156 to £1,309, an increase of £153 per year.
Fixed Tariffs Will be unaffected, but those coming to the end of a contract will probably be unable to find a cheap deal to replace it.
Which energy suppliers are going bust?
September alone saw four small energy suppliers cease trading: PFP, Utility Point, People’s Energy, and Money Plus.
There are concerns that, in the coming days, companies who are unable to pass on the higher prices will also go bust.
What to do if my energy supplier goes bust?
If this happens to you, don’t worry, you won’t stop receiving gas or electricity.
However, you will be moved to a new account with a new supplier. This could take a few weeks and unfortunately, there’s a good chance you could end up on a more expensive tariff. This tariff will be agreed with Ofgem first though.
Citizens Advice have recommended that you take a photo or make a note of your meter readings and download any bills during the transition period to your new supplier. They have also suggested that you should wait for your new account to be set up before canceling any direct debits.
If you owe your old supplier money, you will still need to pay them back. On the other hand, if you are in credit, your money is protected and will be paid back.
I’m concerned this is going to be too expensive
As the UK bounces back from the pandemic, the levels of support are dropping. Payment holidays are ending, the £20 weekly top-up to universal credit is stopping, but despite all this, the financial ramifications are still very prevalent for many.
So, if comparison sites like comparethemarket.com aren’t sufficient in reducing the price of your bills, then could a debt solution be the answer?
- ✅ Consolidate debts into one monthly payment.
- ✅ Freeze interest & charges.
- ✅ Write off unaffordable debt
- ✅ Reduce contact from creditors.
- ✅ Become debt-free in a fixed period of time.