Why can I not switch tariffs at the moment?
As you may have seen on the news, the price energy suppliers pay for gas, known as the wholesale cost, has risen dramatically. This means, not only are consumer gas prices rising, gas is also used in power plants to generate electricity in the UK, which is why that's increased too.
So, with energy prices high, suppliers are restricting the number of tariffs they make available. That means you won’t be able to switch to a new tariff, because there aren’t any to switch to.
What’s this I’m hearing about a price cap? Is that good or bad?
The energy price cap, set by Ofgem, the industry regulator, is the maximum amount suppliers can charge customers on the default tariff. It’s calculated by what Ofgem works out as ‘typical use’. It’s updated in October and April, and on October 1st this year, it went up 12% to £1,277, from £1,138. If you use more than what Ofgem thinks is typical, it’ll end up costing you more.
The price cap is good because even though wholesale prices are rising, the cap is still in place. Even though suppliers are being charged more for wholesale energy, they can't charge customers more than the cap.
Suppliers are heavily restricting the amount of tariffs they have available at the moment, due to the high wholesale energy costs. This means you may end up paying more for your energy, and you probably won't be able to switch right now.
Why are suppliers going bust?
Because they can’t afford the high wholesale energy price. While there are the big energy companies, known as the Big Six, there are also around 70 smaller suppliers. The Big Six can afford the high cost of energy, but some of these smaller suppliers can’t.
What happens if my supplier goes bust?
If your supplier goes bust, don’t worry – your energy supply won’t be affected.
Ofgem, the energy industry regulator, has a safety net to protect you. Take a meter reading if that’s what you do normally. But don’t switch supplier yourself, since this will just confuse the process.
Ofgem will find you a new supplier, and the full switching process should only take a few days to complete. Your credit balance will also be transferred to the new supplier.
Once the switch is complete, the new supplier should get in touch. Ask them to put you on their cheapest tariff. If you want to shop around and switch, you can with TotallyMoney’s energy switching service. But just so you know, while the high wholesale energy cost situation continues, you may not be able to switch.
Is there anything I can do?
Not really, unfortunately. We wish we had better news, but you’re best to just keep an eye on the news and watch out for emails from either your supplier, or TotallyMoney. Keep checking in, and we’ll let you know when it’s time to switch again.