AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- A total number of 9 energy companies have ceased to trade in September itself.
- The 3 new energy suppliers going bust include Enstroga, Symbio Energy, and Igloo Energy.
- The energy supplier failures had impacted over 1.5 million people as of 28 September.
The number of energy companies going bust is increasing by the day. A total number of 9 energy companies have ceased to trade in September alone. There has been change in energy pricing to variable tariffs by most energy suppliers, starting from 1 October.
After their suppliers go out of business, the consumers move towards new energy companies, but they have to pay around £30 a month more than what they were paying earlier, according to Citizens Advice. The charity warned that this winter will be rough for consumers as it discovered that after moving away from the five largest failed suppliers, the consumers will have to pay £6.70 a week more as they shift to the default tariffs of a replacement firm.
For people on default tariffs, an increase of £139 is due in the energy price cap, while for people on pre-payment meters on 1 October, there would be a £153 increase. The energy supplier failures had impacted over 1.5 million people as of 28 September.
ALSO READ: Energy bills to spike after wholesale electricity price rise. 5 stocks to look at
The six companies which have already gone bust in the month of September have been taken over by other energy giants. Of these, 3 have been taken over by the UK’s largest energy and home services company British gas. These include People's Energy, MoneyPlus Energy, and PFP Energy. The other 3 companies include Utility Point, Avro Energy, and Green, which have been taken over EDF, Octopus Energy, and Shell, respectively.
In addition to these six companies, three more have gone bust, which include Enstroga, Symbio Energy, and Igloo Energy, which serve approximately 233,000 customers. According to energy regulator Ofgem, these 3 suppliers don’t even represent 1% of domestic customers in the market. The new suppliers will be selected for their customers by Ofgem itself.
Citizens Advice specifically expressed concerns about the economically weaker families, as they are more prone to be hardest hit due to rising energy costs, increasing cost of living due to rising inflation, as well as a planned cut of £20 a week to their Universal Credit. It has warned consumers that they could be £17.40 a week worse off if they shift to a new supplier without their Warm Home Discount being carried over while shifting. £37.40 a week can be lost by people already in this situation if the planned cut on Universal Credit is implemented.
ALSO READ: How can one save on energy bills?
As more people are set to get trapped into fuel poverty this winter, desperate choices will have to be made by people, like choosing between cooking food and staying warm. According to a recent survey by the advisory service, 35% of the people are concerned that this winter will be hard as they will be struggling to pay their energy bills, and this percentage will further rise to 44% for the households with children, and 45% for the households with yearly earnings of less than £21,000.
Way forward
People are facing the brunt of higher costs and particularly the lowest income group is the most vulnerable to fall into the trap of poverty. Citizens Advice has called out the Boris Johnson Government set aside the cut to Universal Credit it has been planning and also to provide adequate support to the people with low incomes by introducing emergency winter grants.
ALSO READ: What do we know about UK's fuel poverty?
