Half of Britain’s energy firms have gone bust this year with just 24 left – and 3million households will enter winter in debt to their supplier
- Nearly half of all energy suppliers have failed in the past year due to the crisis
- Some 24 providers remain, where there were 47 at the same time last year
- Millions of homes are also already in debt to their supplier before winter
At the start of 2021 there were 47 domestic suppliers including 5 large, 12 medium and 30 small – and nearly half of them have disappeared, with just 24 remaining.
So far, the majority of customers of collapsed providers have been moved to larger suppliers, growing the market share of the large supplier group from 68.5 per cent at the start of the year to 70.1 per cent today.
Furthermore, more than 3million households are entering winter in debt to their energy supplier — half a million more than last year.
Households are going into the coldest time of year owing £510million, a rise of £77million since 2020, with many feeling additional pressures caused by the rising cost of energy, according to new research from Uswitch.
Energy purge: Avro Energy is the supplier with the largest number of domestic customers that has gone bust
Most of the suppliers have failed due to the ongoing energy crisis with wholesale gas prices soaring for providers and subsequently, consumers.
Smaller and medium sized firms have been unable to keep up with the cost and folded, with customers moving to Big Six firms like British Gas and Scottish Power.
Anna Moss, head of consumer markets at Cornwall Insight, said: ‘Suppliers are likely to face tough times ahead. Credit calls on suppliers for electricity balancing are due to increase markedly.
‘Trading arrangements with wholesale trading parties are critical to the retail parties’ survival to reduce exposure to uncapped imbalance prices.
‘Terms which the suppliers will find acceptable may not be forthcoming as wholesale counterparties will be concerned about the long-term viability of businesses whose input cost is higher than their incoming revenue.
‘Those without longer-term deals in place may be forced to pay up-front, offer additional collateral either in cash or equity or buy on spot markets, increasing pressure on cash flow management.
‘The very high wholesale prices have caused significant distress even before winter begins and how suppliers fare is in the hands of wholesale trading parties, and how suppliers can manage their costs through the winter months ahead.’
Omni Energy, MA Energy, Zebra Power, CNG Energy and Ampoweruk are the latest energy suppliers to go bust this week joining a host of others.
Millions of households will be in debt to their energy supplier before winter has even begun
Three millions home are entering winter in debt
Energy accounts should ideally be in credit after the summer months and this is the case for 13.9million households.
Building up credit in the summer months typically prevents having a sharp increase in bills over winter when we consume most of our annual energy use.
However, the number in credit has fallen by 4 per cent compared to last year and 3million households could face problems paying their bills this winter.
Of those in debt, 62 per cent say their debt is higher or the same as it was last year, while only 13 per cent say the amount they owe is lower. The average amount owed is £153.
This year, 59 per cent of households say they are either worried, or very worried, about how they are going to pay for their energy bills this winter.
Some 17 per cent of households say they will go further than just using their energy more efficiently and will avoid putting the heating on even when it’s cold, and more than two million will spend less on food.
Justina Miltienyte, energy policy expert at Uswitch, said: ‘No customer should have to choose between heating or eating and it’s alarming that many households are facing that decision this winter.
‘Anyone who is worried about their energy bills, or their existing debt, should contact their energy supplier in the first instance to see if they can set up an affordable repayment plan.’
There is help available from debt charities like StepChange which provide guidance for people experiencing financial difficulties and National Energy Action (NEA) which offers advice on energy bills and keeping warm at home.
Vulnerable consumers can also benefit through schemes like the Winter Fuel Payment, Cold Weather Payment and Warm Home Discount.
Uswitch surveyed 2,000 adults in September this year.