Supplier Gone Bust? These Are the Steps That Protect You

Why So Many Energy Providers Are Shutting Down

When a supplier collapses, it often feels sudden and dramatic, and at Ethical Switch, we know how stressful these situations can feel. But the truth is, you’re far more protected than you think. The biggest reason suppliers fail is the volatility of wholesale gas and electricity prices.

Between 2021 and 2024, wholesale gas prices in the UK spiked by over 250%, pushing smaller suppliers beyond their limits.

Many operated on thin margins, lacked financial reserves, or failed to hedge energy prices properly. Combine this with tightened Ofgem regulations and increased pressure on green initiatives, and you get a perfect storm that only stronger companies can survive.

So if your supplier goes bust, it’s not because you chose wrong, it’s a symptom of a turbulent energy market, not your personal decision.

What Happens When Your Supplier Collapses

When an energy supplier collapses, it often sparks panic, but there’s absolutely no need to worry. Your gas and electricity will not be switched off, even for a moment.

Ofgem immediately steps in to activate the Supplier of Last Resort (SoLR) process, which ensures a new licensed supplier takes over your account smoothly.

Throughout this transition, everything in your home continues to function exactly as it should.

Here’s what stays perfectly normal:

• Your lights remain on.
• Your heating continues to work without interruption.
• Your prepayment meter still accepts top-ups.
• Your credit balance stays protected.
• Your daily usage continues as usual.

The only real change is that in the background, a new company manages your account while the paperwork shifts behind the scenes. You can think of it as your energy supply being safely handed to a new guardian while you carry on with your day.

This entire process works in your favour, and Ethical Switch guides you through each step so you always know exactly what’s happening with your energy supply.

How Ofgem Ensures You’re Never Left Without Power

Ofgem has built a strong safety net to ensure customers stay fully protected whenever an energy supplier collapses. The moment your old supplier ceases trading, Ofgem appoints a new licensed supplier to take over your account, and this new provider is legally required to honour your credit balance.

So if you had £200 sitting in your account, rest assured that money remains yours. Your energy billing also continues as normal, although you may be temporarily placed on a “deemed tariff,” which may not be the cheapest but keeps your account stable while things transition.

One of the biggest advantages of this system is that any existing complaints or disputes with your old supplier don’t simply vanish. In most cases, the new supplier will handle them, and if not, Ofgem will guide you through the next steps.

The entire process is designed to keep you safe, supported, and informed throughout.

Immediate Steps You Should Take to Stay Protected

When your supplier goes bust, the instinct is to panic or immediately hunt for a new tariff, but resist the urge. Acting too quickly can cause more problems than it solves. The best thing you can do at this stage is pause, stay cal,m and let Ofgem carry out the Supplier of Last Resort process.

●     Wait for Ofgem to Assign Your New Supplier

Your energy supply continues as normal while Ofgem selects a replacement provider. Switching before this happens can interfere with your account transfer, delay refunds and create unnecessary complications.

●     Record Your Meter Readings Immediately

Take up-to-date gas and electricity meter readings and store them safely. These readings protect you from disputes or incorrect charges during the transition.

• Keep All Important Documents Handy

Hold onto your last bill, recent statements, and any prepayment top-up receipts. These documents help verify your account if any inconsistencies arise later.

• Review Details When the New Supplier Contacts You

Once your new supplier reaches out, they’ll confirm your temporary tariff, your credit balance and the next steps. Only after everything is fully updated and stable should you begin comparing tariffs.

• Avoid Switching Too Early

Switching before the transition is complete can cause account mismatches and delay refunds. Waiting a little longer ensures everything transfers smoothly and saves you a lot of stress in the long run.

How to Check Your Final Bills and Outstanding Payments

Once Ofgem assigns your new supplier, they’ll reach out with updated account information and explain the next steps.

During this transition, the new supplier works closely with the administrators of your old supplier to reconcile your account. This includes confirming how much energy you’ve used, whether you owe anything, or whether you’re due a refund. If you had an outstanding balance, the new supplier will arrange payment.

If you were in credit, that amount will be protected and transferred to your new account. This process can take a few weeks, especially when large numbers of customers are affected.

To make everything smoother on your end, it helps to:

• Keep copies of your last few bills and statements
• Save screenshots of your online account if accessible.
• Record your meter readings during the transition.
• Double-check all numbers once your new account is set up

Staying organised ensures everything adds up correctly.

What Happens to Your Credit Balance and Refunds

One of the first questions people ask when a supplier collapses is, “Wait, what about my money?” The good news is your credit is fully protected by Ofgem, so nothing disappears into thin air.

Your new supplier is required to transfer or refund every penny, whether it’s £20 or £200. Sometimes it takes a little longer, especially if large credit balances need extra checking, but your cash is safe.

And if you’re a prepayment customer, you can keep topping up just like normal. Your meter, key or card will continue working, and the new supplier will handle any updates.

Think of it as your money taking a short, safe detour before returning home.

Should You Switch or Stay with the New Supplier

When your account moves to a new supplier, you’ll usually be placed on a temporary tariff. It’s not always the cheapest option, but it keeps everything stable while your account is being sorted.

Once your credit balance, meter readings, and contract details are confirmed, you’re free to start exploring the market again.

Many customers do end up finding a better deal after the transition is complete. The key is not to rush; switching too early can delay refunds, complicate account transfers, and create unnecessary stress.

Give the process a little time, then use a trusted comparison tool to find a tariff that fits your budget and long-term needs. Patience pays off here.

What Changes Before and After a Supplier Collapse

To help you see exactly what happens when a supplier collapses, here’s a quick side-by-side comparison. It shows how everything continues running smoothly, even while the transition takes place.

As you can see, most of the heavy lifting happens automatically behind the scenes. That’s why staying calm and letting the process unfold is the smartest move you can make.

Wrapping It Up

Energy supplier collapses can feel chaotic, but the truth is the entire process is built to protect you, not stress you out. With Ofgem’s safety net in place, your lights stay on, your credit stays safe, and your account is transferred smoothly to a new supplier.

No drama, no downtime, and definitely no sitting in the dark wondering what’s happening. Considering that over 30 UK suppliers have collapsed since 2021, it’s reassuring to know the system is designed to keep you covered every step of the way.

Your job is simple: stay calm, avoid rushing into quick switches, and give the transition a little time.

Once everything settles, that’s when Ethical Switch steps in to help you compare trusted UK suppliers, find better tariffs, and avoid paying more than you need to.

With the right knowledge and a little patience, you’ll get through any supplier collapse smoothly, safely and confidently.

Frequently Asked Questions

Will My Power Be Cut Off if My Supplier Goes Bust?

No, your energy will not be disconnected. Your gas and electricity continue as normal, even if your supplier collapses overnight. Ofgem’s safety net ensures there is zero interruption to your supply.

Do I Lose My Credit Balance?

No. Ofgem’s regulations fully protect your credit balance. Whether you had £20 or £200 in credit, the new supplier must transfer or refund it once the transition is complete.

How Long Does The Transition Take?

Most customers experience a smooth handover in 2 to 6 weeks, depending on the size of the supplier collapse and the number of accounts being transferred.

Can I Switch Suppliers During The Process?

You can, but it’s strongly recommended to wait until your new supplier finalises your account. Switching too early can delay refunds or cause billing mismatches.

What Happens If I Had an Ongoing Complaint With My Old Supplier?

In most cases, your new supplier will take over the complaint. If not, Ofgem or the Energy Ombudsman will guide you through the next steps. No issue is ignored or lost.

What If I’m a Prepayment Customer?

Your prepayment meter continues working normally. You can keep topping up as usual, and any updates needed for keys or cards will be handled by your new supplier later.