What happens if my energy supplier goes bust?
If your energy supplier goes bust, don’t panic. You won’t lose your energy supply. In this guide we explain the process in place to help you.
See all of our available tariffs and prices.
Updated on 24th July 2026 by:
Simon Trivella, Head of Conduct Risk Strategy
In this guide
How wholesale energy prices affect suppliers
The increase in global wholesale energy prices - driven by post Covid-19 demand and the conflict in Ukraine - led to many gas and electricity suppliers in the UK to fail with customers being transferred to a supplier of last resort.
While prices subsequently fell, more recent events in the middle east have led to prices increasing again. Overall, the market remains volatile making trading difficult for both large and small suppliers.
When an energy company goes bust, Ofgem (the UK’s energy regulator) appoints a new supplier to look after customers and ensure their supply is not affected.
Thanks to our reputation as a reliable energy supplier, we’ve stepped in to help thousands of customers from failed suppliers. We’ve been around for more than 200 years, so rest assured we’re here to stay.
What happens when your energy supplier goes bust
As a UK consumer, Ofgem have some measures in place to protect you if your energy supplier goes bust.
Supplier of Last Resort (SoLR )
Ofgem will appoint a new supplier - known as the supplier of last resort or SoLR - so customers keep getting gas and electricity supplied to their homes. The new supplier is carefully selected by Ofgem.
If your supplier goes bust here are some important things to know:
- Don’t worry, you’ll still have gas and electricity
- A new supplier will contact you to tell you they've taken over your energy supply
- If you’re in credit, you won’t lose your money
What do I need to do if my energy supplier goes bust?
When you find out your energy supplier has gone bust, here are some practical steps to take before your new supplier contacts you:
1. Take meter readings
Check out our guide to reading all types of meters. They’re written for British Gas customers but may help.
2. Download or keep any old bills
They can help prove your payment history and your credit balance or debt.
3. Don’t switch to a new supplier
Wait until the new supplier appointed by Ofgem contacts you and sets up your new energy account. They’ll explain the terms of the new tariff they’re providing and other tariff options. You might find it harder to get any money you’re owed if you switch before this happens.
Your old supplier, or the Administrator acting on their behalf, will have to close your account and send you a final statement or bill. This can take some time, so be patient and make sure you have your meter readings ready if they ask for them. Your final bill will determine whether you are owed money (credit) or if you owe money.
If your account is in credit
If your home energy account is in credit, your money is protected and your new supplier will tell you how and when you’ll get this back. If you’re a small business customer, Ofgem will try to choose a supplier that can refund some or all your credit, but this isn’t guaranteed. Wait for your new supplier to contact you and ;they’ll tell you what will happen to your credit.
If your account is in debt
Don’t worry. If you owe money the arrangements to pay this back can vary. You’ll usually need to pay back the money you owe to your old supplier or their Administrator. In some cases, your new supplier will take responsibility for the money you owe and this will be applied to your new energy account. Your new supplier will let you know if this is the case.
Do I need to cancel my Direct Debit?
If you pay by Direct Debit you shouldn’t cancel it. This way you keep paying for the energy you use. Your new supplier will tell you what’s going to happen with future payments, whether your Direct Debit will be transferred or how to create a new one where necessary.
What about my Warm Home Discount?
If you’re eligible for the Warm Home Discount (currently a £150 payment for customers who qualify for certain benefits), check that your new supplier will pay you this. If an energy supplier has more than 150,000 customers, they have to pay. Some smaller suppliers also pay it, even if they have fewer than 150,000 customers.
Shopping around for a new deal
When the transfer is complete, your new supplier will confirm your new tariff and what other tariffs are available to you. You can then decide if you want to shop around for a better deal. Check out our guide to help you compare energy suppliers
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Why do energy suppliers go bust?
Wholesale energy costs are the prices energy suppliers pay to obtain gas and electricity which we then supply to our customers. Suppliers, like us, buy most of the energy we provide to you in advance. This is known as hedging. Purchasing ahead helps to even out prices over time. This protects you from big jumps in your energy bills.
For some smaller suppliers it’s very difficult to buy ahead in the same way and they can only buy energy a couple of months in advance. This means when wholesale prices increase, they face pressure to pass on all wholesale increases as soon as possible to their customers or take a loss on fixed-price contracts.
You see that in the way some smaller energy suppliers charge for energy use. Some suppliers, like us, charge you at the end of the month for the energy you’ve used in that month. However, some smaller providers charge you at the start of the month so you pay in advance of using energy.