From price caps to fixed deals, your questions about the energy crisis answered


MILLIONS of people whose energy firms go bust this winter face paying £400 more to new suppliers taking over their contracts.

The energy crisis, sparked by rocketing wholesale gas prices, is panicking many cash-strapped families.

Don't panic - Sun Money is here to answer your big questions in our energy crisis special

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Don’t panic – Sun Money is here to answer your big questions in our energy crisis special

Customers on discounted deals at £900 or less per year with collapsed small providers are set to be moved on to variable tariffs at the £1,277 annual price cap soon after replacement firms take over their energy supply.

Prices are set to leap further from April, when the price cap could soar to £1,500 or more — but reduced natural gas prices might mean a lower increase.

More small energy firms are expected to collapse and join the seven companies that have gone out of business in the past six weeks.

One and a half million customers have been hit as Avro, Green, Hub, PfP, MoneyPlus, People’s and Utility Point went under.

But don’t panic.

Sun Money is here to answer your big questions in our energy crisis special.

Q) IF my supplier goes bust, how expensive will my deal be at my new supplier?

You are likely to be moved on to a variable tariff around the price cap limit soon after you join. This is £1,277 for the average household.

Q) Will my supplier go bust?

If it is a small firm, yes, it is likely to go under in the coming months.

But if it is a big supplier, it will probably survive, as larger firms have stronger finances.

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Bulb, which has 1.7million customers, is the biggest firm known to be in trouble. It has asked for a government bailout.

Q) What should I do?

Nothing. Don’t panic.

Don’t switch from a variable tariff, as fixed deals are no longer a cheaper option.

Q) Why can’t I save by switching?

Cheap fixed-price discount deals have all been scrapped.

Many fixed-price customers are on deals costing between £800 and £900 a year, which were available until recent months.

The cheapest fixed deal available now is £1,427, £150 more than £1,277 variable-rate price cap tariffs.

Some fixed deals cost £1,600-plus — double some customers’ fixed price bill.

Q) Why are fixed deals so expensive now?

Natural gas prices are at record highs — almost three times more than in January — and companies expect prices to stay high for months, meaning they need to charge more or they cannot afford to buy the natural gas.

Q) Is there any way to dodge price increases?

No. But accepting the variable tariff — which is pegged at the price cap — is a better deal than a higher-price fixed deal.

Q) As my small supplier might go bust, should I move to a big firm now?

No. You will almost certainly pay more if you move.

Smaller providers’ customers are mostly on fixed-price deals, virtually all of which are cheaper than £1,277 variable deals.

That is the lowest price you will get from a big firm if you switch now.

Q) What should I do if my supplier goes bust?

Take meter readings and wait for your new supplier to contact you in a few weeks’ time. Cancel the direct debit to your old provider.

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Do not ask to switch yet, as it will not go through. But you can switch when your new provider confirms your account details.

Q) Will I get my credit back from my bust supplier?

Yes, via your new provider.

Q) What if my firm goes under but no company will take on its customers?

The Government and energy regulator Ofgem will appoint a “special administrator” to provide you with energy.

You will not be cut off.

Q) Will the price cap go up again in April?

Yes, probably by up to £300.

It is tough but lower than the price would be if there was no price cap.

Q) How long will the crisis last?

Six months, at least — and probably longer.

Q) What help is available if I struggle to pay my bills?

Those on low incomes can claim Winter Fuel Payments and the Warm Home Discount.

If you really can’t pay your bill, contact your supplier. It must give you longer to pay what you owe.

Q) What has caused this crisis?

Global gas prices rocketing due to more demand as Covid eases, coupled with reduced supply from Russia and a lack of UK wind energy in a calm start to autumn.

‘New supplier increased my bills by £320’

JASON SWINBURN’S energy supplier went bust, owing him £300 – then his new supplier put up its prices by £320.

The dad of two, from Swindon, was hit by the energy industry meltdown when his provider, Green Network Energy, collapsed.

Jason Swinburn's energy supplier went bust, owing him £300 – then his new supplier put up its prices by £320

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Jason Swinburn’s energy supplier went bust, owing him £300 – then his new supplier put up its prices by £320

Jason, 44, got his £300 refund back via his new provider, EDF, which took over GNE households.

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But then EDF said it would move all ex-GNE customers from an initial cheap fixed-rate deal to its pricey standard variable tariff.

The move will cost customers up to £320 per year more, according to moneysavingexpert.com – although customers did have the option of picking a different EDF fixed-price deal.

Retail consultant Jason, who has a boy, six, and a girl, four, with wife Lucy, 37, who also works in retail, said: “I switched to Green Network Energy but they went bust just before the switch was due to complete, in February.

“They had taken a £300 payment in advance. I waited and EDF repaid it to me. EDF then emailed saying they were putting my price up already, by moving me to their variable tariff from October 4.

“So I’ve switched to a cheaper two-year fixed price deal with E-On Next. It’s one thing after another with energy this year. If your firm goes bust, you can switch again if a better deal is available.”

EDF said: “Global wholesale prices for gas are increasing at an unprecedented rate, impacting both fixed and variable tariff prices.”

Martin Lewis explains why you need to take a screenshot of your energy bill NOW





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