Martin Lewis explains what to do with direct debit bills if your energy business collapses
Speaking on Radio 5 Live this afternoon, Martin Lewis was responding to questions from worried listeners who have been caught up in the recent crisis in energy companies
Image: ITV WS)
Martin Lewis explained whether you should cancel your direct debit if your energy company goes bankrupt.
The founder of MoneySavingExpert has tackled the energy crisis, with nine businesses collapsing in the last month alone, affecting an estimated 1.7 million homes.
IglooEnergy, Symbio Energy and ENSTROGA all went out of business today, leaving 233,000 people without suppliers.
It follows PfP Energy and MoneyPlus Energy which both went out of business on September 7, shortly before Utility Point and People’s Energy on September 14.
Green and Avro Energy were the next to sink, both collapsing on September 22.
Energy companies are grappling with the costs of rising gas prices which are increasing at breathtaking rates.
Since January, UK gas prices have risen 250%, including a 70% jump from August alone.
The crisis has raised fears that more energy suppliers could follow suit and go out of business in the weeks and months to come.
Speaking on Radio 5 Live this afternoon, Martin was responding to questions from listeners who have been caught up in the energy business crisis.
He was contacted by a failed People’s Energy auditor who asked if he should cancel his levy due on October 1.
“I have been contacted by British Gas but no specific date to move to their place,” she said.
Martin explained how the regular Ofgem says you don’t need to cancel your direct debit if your energy business has collapsed.
However, for more peace of mind, you can choose to stop the payment.
Did you have trouble switching to a new energy supplier? Let us know: [email protected]
How the gas shortage affects you
Martin added: “They should all be moved, but some people get pretty pissed off when their old energy provider still automatically takes a direct debit when they switch to a new one.
“So personally, I would probably cancel it.”
The general advice of Ofgem if your energy supplier has gone bankrupt is to sit back and wait to be contacted by your new supplier.
You will switch to a variable tariff protected by the energy price cap and any credit will also be transferred.
But on its website, Ofgem says you can cancel your direct debit if you want, even if you haven’t yet switched.
“You will continue to move to the provider of your choice if you already have a change in progress,” he explains.
“You don’t have to do anything. Your supply will not be interrupted and it should only take us a few days.
“Ofgem’s safety net will protect your supply and any credit balances.”
Speaking last week, Martin also asked households to screenshot their energy bill online now, even if they haven’t seen their energy supplier go bankrupt.
Indeed, if a supplier goes bankrupt, you have a document of your last energy consumption.
Likewise, it’s useful to do this if your supplier has ever gone bankrupt – as long as you can still access their website – so you get an accurate read on your new business.
Speaking on his ITV show last week, Martin said households subject to energy price caps – mainly those with standard variable tariffs – are now getting the cheapest deals.
The energy price cap increases from this Friday, October 1, which means an increase in energy bills for 15 million homes.
Those whose default rates pay by direct debit will see an increase of £ 139, from £ 1,138 to £ 1,277.
Prepayment customers will see an increase of £ 153, from £ 1,156 to £ 1,309.