Energy price rises and supplier failures: your questions answered

We often get questions about the impact of the energy crisis and how it affects your bills. 

Here, we answer some of your most common queries. Click on the links above to jump to the questions you have.

We're all feeling the strain of rising bills. See 10 ways to save money on energy. 

How much are energy bills in 2024?

Energy bills are limited by a price cap set by energy regulator Ofgem. It changes every three months.

This means typical bills are around £143 per month (£1,717 annually) between October and December 2024.

That's a 10% increase (adding around £12 per month to bills) compared with July to September's prices. Rates remain higher than before the energy crisis.

The price cap only applies to customers with variable energy tariffs (also called default and out-of-contract). If you have a fixed tariff, your bills won't change.

The actual amount you pay depends on:

• where you live 
• the type of tariff you're on 
• how you pay for energy.

Find out how the energy price cap affects your bills.

What is the energy bills price cap?

The price cap limits the maximum amount energy suppliers can charge for each unit of gas and electricity you use, as well as the maximum daily standing charge. 

The standing charge is what you pay to have your home connected to the grid. 

The price cap applies to variable energy tariffs. These might be called standard tariffs, default tariffs or out-of-contract tariffs – all of which are are more or less the same thing. 

If you haven't switched energy supplier or tariff in a while, or took no action when your last fixed deal ended, you'll be on a variable tariff. The majority of households (around 28 million of them) are in this position.

The price is not an upper limit on your energy bills - this is a common misconception. The cap relates to the rates of your bill rather than your bill itself. So if you use more energy than other households, you'll pay more than them and vice versa.

Find out how to estimate your own energy use.

What help with energy bills is available if I can't afford mine? 

‘I’m more worried about the energy price hike than literally anything else right now for the direct and substantial effect it will have on low-income families.’ – Twitter user

If you’re struggling to keep up with higher energy bills, start by contacting your energy supplier. 

It might feel like the last thing you want to do, but your provider won’t cut off your supply if you work with it to agree how much you can pay. Energy firms must agree a payment plan with you that you can afford. 

Options can include:

• reviewing your payments or debt repayments 
• reducing your payments or taking a payment break 
• allowing you more time to pay 
• access to hardship funds.

You can ask your supplier whether you can be added to its Priority Services Register too, which gives free help and support if you’re in a vulnerable situation.

Find out more about what help is available if you’re struggling to pay your energy bill.

In addition, it's worthwhile checking whether you are eligible for the following government schemes and benefits:

• The Warm Home Discount is £150 off your electricity bills if you get the Guarantee Credit element of Pension Credit. You might also qualify if you have a low income and high energy costs.
• The Cold Weather Payment is £25 for each seven-day period between November and April that it’s below – or forecast to be below – 0°C. Certain benefits qualify you for this. In Scotland there's a £58 Winter Heating Payment instead if you get qualifying benefits.
• The Winter Fuel Payment is between £200 and £300 to help cover winter heating costs. To qualify, you need to receive pension credit or other means-tested benefits. It's only available in England and Wales.

Will my energy bill go down when the price cap changes?

If you’re on a fixed deal, your energy unit rates will stay the same until the end of your contract. This means your monthly bills should stay more or less the same, unless you start using more or less energy than you have in the past. 

If you're on a variable tariff, your price can change whenever your supplier changes its prices. You’ll get 30 days’ warning of this change. This is likely to happen every time the price cap changes.

The cap is expected to fall slightly in January 2025, according to energy consultancy Cornwall Insight.

Why is the direct debit for my energy bills increasing? 

We often hear from energy customers facing big increases to their direct debit payments.

Energy firms have to take reasonable steps to make sure your direct debit is fair. This means it should be based on the best information they have, including the amount of gas and electricity you use.

Energy companies should review your direct debit periodically (at least once a year) to make sure it matches the cost of your energy use. 

If it doesn’t, they may increase (or decrease) your direct debit payments. This applies even if you’re on a fixed deal.

If your direct debit increase is a surprise, much higher than you expected, or you think your account is building up too much credit, you should challenge your supplier:

• Submit meter readings to your supplier so that your bills aren’t based on estimates. If you have a smart meter it should do this for you. Find out how to read your electricity and gas meters or what to do if your energy company isn't getting readings from your smart meter.
• Ask it to explain why your direct debit is changing, and how it has chosen that amount. It must tell you.
• If your provider can’t justify why your direct debit is increasing, you can try complaining to the Energy Ombudsman.

If you’ve built up lots of credit with your energy supplier, you can ask for it back at any time. 

Suppliers must refund you unless they have a good reason not to (which they’ll need to justify). Alternately, you might want to reduce your credit gradually over winter while you’re using more heating. If so, check whether your direct debit hike is still necessary.

Find out more: energy tariffs explained.

Will my energy supplier fail and what do I do if it goes bust?

Dozens of energy suppliers stopped trading in the autumn/winter of 2021/22 including Avro Energy, Bulb, People's Energy, PFP Energy and Together Energy.

While it wasn't uncommon for one or two small energy suppliers to go bust in the autumn and winter months previously, that was far more than usual.

Gas and electricity suppliers do not have to disclose to us what is going on behind closed doors, so we often only find out that there is a problem when they announce that they have ceased trading. 

However, energy firms do have to provide information to market regulator Ofgem about their position and ringfence a certain amount to pay industry charges if they go bust.

Ofgem also has a process in place, if your supplier closes, to:

• find you a new supplier (called a Supplier of Last Resort)
• honour any credit you have (your new supplier must pay it back).

Don’t panic – your gas and electricity supply won’t be cut off.

It usually takes a few days for a new supplier to be chosen, and a couple of weeks to be transferred. Your new provider will get in touch with you to tell you about your new tariff, how payments will work and how you’ll get any credit back.

While you wait:

• take a meter reading. Take a photo if possible so you have a dated record
• don’t switch supplier (this can make it trickier to transfer you and pay back any money you’re owed).

How long will it take to get my credit back from my failed energy supplier?

If you were in credit with your former energy company that’s since stopped trading, there’s no set time you could be waiting to get that credit transferred to your account with your new supplier.

Ofgem says your new energy provider, selected through the Supplier of Last Resort process, will contact customers to explain how it will take on their accounts. 

It told Which? that Suppliers of Last Resort work with administrators to determine the final credit balances of customers of failed suppliers and communicate this to customers.

How quickly this can be done depends on several factors:

• The quality of the data held by the failed supplier.
• The number of customers being migrated as part of a Supplier of Last Resort process.
• The arrangements made between a Supplier of Last Resort and the administrator for the failed energy company.
• Any third-party service providers to the failed supplier.

For this reason there's no set period within which this process needs to be completed, and therefore how long those who were in credit with a supplier that’s gone bust could be waiting before seeing that credit again.

Here’s our advice on how to complain to your energy provider.

Can I still get my Warm Home Discount if my supplier closes?

If you’re in ‘core group 1' (in England and Wales) for the £150 Warm Home Discount (i.e. you get the Guarantee Credit element of Pension Credit) you'll usually continue to get your payment from the new supplier. This should happen automatically.

The Department for Work and Pensions works with energy suppliers to identify customers who get Pension Credit.

If the new supplier chosen for you by Ofgem is very small, it may not have to pay the Warm Home Discount and you may lose your payment. But this is unlikely as Ofgem takes providers’ ability to make the payments into account when it’s choosing which company will take over your supply. 

Also, from 2023/24 all suppliers with more than 1,000 domestic customers will have to participate in the scheme. It was more than 50,000 previously.

Find out more about the Warm Home Discount.

If you’re in 'core group 2’ for the Warm Home Discount, you’ll also usually continue to get it automatically. You’ll be in this group if you don’t get the Guarantee Credit element of Pension Credit but are on a low income and get certain means-tested benefits.

Since 2022, Scotland's Warm Home Discount scheme has been separate from the England and Wales scheme and works differently. If you're in the 'broader' group (the equivalent of core group 2 in England and Wales) you have to apply for the Warm Home Discount, so if your supplier goes bust you'll need to reapply for it with your new electricity supplier.

In Scotland, energy suppliers have different criteria for who is eligible for payments in the ‘broader’ group. If you qualified with your old supplier, ask your new provider whether you'll qualify with it too, and be prepared to reapply. It’s worth applying as soon as you can, because the number of payments available from each supplier can be limited.

I'm with a small energy supplier - should I switch?

If you're tempted by a fixed-term tariff check the standing charge and unit rate carefully against what you're currently paying to see whether you'd be better off.

Try to estimate what you'll pay over the next 12 months, or use our energy compare tool to estimate, then compare with the fixed deal's offer. 

Make sure you check whether the firm is among the best energy suppliers for 2024.

If you're concerned about increasing costs, head to our advice on cutting your energy bills.