What happens if your energy supplier goes bust?

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Ever thought about what would happen if your energy supplier went bust?

Apart from the flurry of firms that went into administration in 2021 and 2022 due to soaring energy prices, it doesn’t happen too often.

Which is fortunate because while you won’t have your gas or electricity cut off, it does mean additional hassle and uncertainty.

Here’s what to expect if your energy firm goes bust.

If your energy supplier is a small firm…

Every year, a handful of small energy firms collapse for various reasons.

For you as the customer, the process is pretty straightforward: take a meter reading, sit tight and wait.

The UK’s energy set up is such that when one firm collapses, the industry regulator Ofgem will appoint another firm to take over its customer base.

Essentially, it’s business as usual for customers – your gas and electricity won’t be cut off at any time.

Just before the switch, photograph your meter if you can and download your previous bills.

It means you know exactly how much credit you have and how much energy you’re using in case of any disputes.

If your account is in credit, this money will automatically be ported over, along with any direct debits for payments.

Once the transfer is complete, your new energy firm will be in touch to introduce themselves.

This is the time to check that any credit on account has been correctly ported across.

You should also check the details of your new tariff, as it could be much more expensive than your old one.

This is also a good time to scout around for a better deal.

If your energy supplier is a big firm…

Most energy suppliers that collapse are start ups or small firms with only a few thousand customers, which means it’s relatively easy for Ofgem to find another supplier to take over their contracts.

The last large energy supplier to collapse was Bulb Energy at the end of 2021.

It had 1.7 million customers, and was considered too big to fail – or at least to fail in the same way.

So instead of just allowing it to go bust, Ofgem put it into special administration.

Special administration was something that was introduced as part of the Energy Act in 2011 and had never been used before Bulb.

This legislation allows the insolvent company to continue supplying energy to its customers, rather than passing them directly onto a competitor.

In the case of Bulb, the government set aside £1.7billion to allow Bulb to continue operating.

Again, it was business as usual for customers during the special administration period.

And in fact, it was even more straightforward because as long as the special administration status was in place, customers had their existing tariffs maintained.

There were no changes to their direct debit details, credits on their account were protected, benefits like the Warm Home Discount continued and their energy supplier remained the incumbent firm.

At the end of 2022, Bulb was finally acquired by Octopus Energy.

The transition from the old firm into the new is the same: for customers it’s business as usual, but take meter readings and download old bills just in case.

This post was originally published in November 2021. It was updated in January 2025.