More energy suppliers set to fail warns expert
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Households fear shock hikes to their gas and electricity bills as a direct result of their supplier collapsing. Those on low incomes may lose access to the £140 warm home discount while debt reduction plans for customers in arrears could be torn up once their account is transferred to a new supplier.
Ange and Damien Wilson, from Southend-on-Sea, have seen two energy suppliers collapse in quick succession and now fear their bills could jump by £600 a year.
After the collapse of First People’s Energy then Green Energy, Ange, 39, expects their winter energy bills will hit £200 a month.
That is around £50 more than before and would add £600 to their annual energy bill.
The couple, who have three sons Aiden, 9, Fergus, 7, and Cillian, 5, have always kept energy usage to a minimum, in a bid to save money and the planet. “I can’t see what else we can do to cut bills,” Ange said.
Lydia Bryant and Jack Driver fear their bills will “skyrocket to an unsustainable level” after the collapse of supplier People’s Energy.
Their deal was the cheapest on the market when they took it out last year, but their new supplier will be under no obligation to match it.
The couple, from Cheltenham, Gloucestershire, are anxiously waiting to hear how much British Gas will charge once it takes over their account.
Getting a cheaper deal will be harder than before as suppliers collapse, which will reduce competition.
Gillian Cooper, head of energy at Citizens Advice, said supplier failure causing an unexpected problem for the poorest households. “Many people on low incomes risk losing their £140 warm home discount when they’re moved to a new supplier.”
Cooper said those who have fallen behind on their bill and have set up a debt repayment schedule with their supplier could also be in trouble. “Some customers in debt may see their agreed repayment plans torn up,” she said.
Mark Abrams, from money and bills website askbill.org.uk, said anyone worried about their bills should speak to their new supplier as soon as possible for help in managing payments and to ask about available support.
“If you’re in credit with your old supplier, your money is protected and you’ll be paid back. If in debt, you’ll still have to pay the money you owe.”
Abrams said those on low incomes should speak to their new supplier immediately to see if they will qualify for the £140 Warm Homes Discount this winter.
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Kevin Pratt, energy expert at Forbes UK, said nobody needs to worry about the gas and electricity being cut up when their supplier collapses, as Ofgem will ensure the lights are kept on.
“Your new supplier will honour any credit balance you have on your account, as part of Ofgem’s safety net arrangements.”
Pratt suggested taking a meter reading or photo with your phone and record the date. “This will show you when you stopped paying the old supplier and started with the new one.”
Wait until your new supplier gets in touch before shopping around for a cheaper deal. “If you don’t think it is good value, ask if it has any other suitable deals, or check the wider market.”
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