What does UK energy crisis mean for YOU?

WITH headlines about a looming energy crisis, I’ve been inundated with questions from consumers.While the Government is adamant there will be no three-day week and the lights will stay on, several suppliers have already gone bust with more likely to follow. And increasing energy bills are a likelihood if not inevitable. Here’s what you need to know:

WHAT IF MY SUPPLIER GOES BUST?

Business Secretary Kwasi Kwarteng has promised there is “absolutely no question of the lights going out this winter”. If a supplier goes bust, energy regulator Ofgem appoints another to take over the contract, including any credit balances you may be owed, so you will not lose money. However, there is no guarantee bills will remain the same and, in the past, consumers have ended up on more expensive tariffs following the switch to a new supplier. So shop around to make sure you are getting the best deal.

WILL MY ENERGY BILLS INCREASE?

Almost certainly, yes, and the increase could be by as much as 40 to 45 per cent, according to experts.

Doing nothing is probably not an option, either. If you are not already on a “standard variable tariff”, moving to this with your current supplier may save you money in the short-term.

This tariff is protected by Ofgem’s price cap and very few tariffs will be cheaper. Alternatively, you could find the cheapest one- or two-year fixed deal. This should help insulate you against price inflation over the coming months. The Business Secretary confirmed the price cap will remain. On the face of it, this is good news for consumers.

However, history tells us the price cap hurts smaller suppliers who are unable to pass on increases when wholesale costs of energy rise.

This leads to small suppliers going bust. Many will argue this has no effect on the consumer but if smaller suppliers go bust, there is less competition and this leads to fewer competitive tariffs for consumers.

Consumers nust be protected.