Several UK energy suppliers have collapsed in recent years — leaving millions of customers wondering what happens next. The good news is your energy supply is protected by law. Here is exactly what happens and what you need to do.
In this guide
Will my energy supply be cut off?
No — your gas and electricity supply will not be cut off if your supplier goes bust. This is one of the most important things to understand. Furthermore Ofgem has a well-established process for dealing with supplier failures that ensures customers never lose their energy supply.
The physical infrastructure that delivers energy to your home — the pipes and cables — is completely separate from your energy supplier and is managed by network companies. Consequently even if your supplier ceases trading overnight your gas and electricity continues to flow without interruption.
The key message: Do not panic if your energy supplier goes bust. Your supply is safe, your credit balance is protected and Ofgem will arrange a replacement supplier for you. You do not need to take any emergency action.
What is the supplier of last resort process?
When an energy supplier fails Ofgem appoints a Supplier of Last Resort (SoLR) — an existing energy supplier who takes on the failed supplier’s customers. This process is managed entirely by Ofgem and happens automatically — you do not need to do anything to trigger it.
Supplier fails
Your energy supplier informs Ofgem it can no longer trade. Consequently Ofgem immediately takes control of the process to protect customers.
Ofgem appoints a new supplier
Ofgem runs a competitive process to select a Supplier of Last Resort. Additionally they choose a stable financially sound supplier capable of taking on new customers. This typically happens within days of the failure being announced.
You are automatically transferred
Your account is automatically moved to the new supplier. Furthermore your new supplier contacts you with details of your new account, tariff and how to manage your supply going forward.
You can then switch again
Once settled with your new supplier you are free to compare deals and switch to a cheaper tariff. Consequently being moved to a supplier of last resort does not lock you in — you can switch at any time.
What happens to my credit balance?
If you pay by monthly direct debit you have likely built up a credit balance with your supplier over the summer months. This credit balance is protected under Ofgem rules — your new supplier is obliged to honour it.
However the process for recovering your credit balance can sometimes take time. Furthermore in some historical supplier failures customers had to wait several weeks for their credit balance to be confirmed and transferred. Consequently it is important to take a meter reading on the day your supplier fails to ensure accurate final billing.
Take a meter reading immediately: As soon as you hear your supplier has failed take a gas and electricity meter reading and keep a record of it. Additionally photograph your meter display with a timestamp. This protects you if there is any dispute about your credit balance or final bill amount.
What tariff will I be moved to?
When you are transferred to a Supplier of Last Resort you will typically be placed on that supplier’s standard variable tariff — not necessarily the cheapest tariff they offer. Consequently you should compare deals as soon as you are settled with your new supplier.
Furthermore any fixed tariff you had with your failed supplier will no longer apply — you will be moved to a standard variable tariff regardless of whether you were previously fixed. However you are free to switch to a new fixed deal immediately with any supplier once the transfer is complete.
With the July 2026 price cap confirmed at £1,862 it is particularly important to switch to a fixed deal quickly after being moved to a new supplier — the standard variable tariff you are placed on may be significantly more expensive than the best available fixed deals.
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Don’t panic — keep your direct debit running
Do not cancel your direct debit. Furthermore do not switch supplier immediately — wait for Ofgem to appoint a new supplier and for the transfer to complete. Switching during the process can complicate the credit balance transfer.
Take a meter reading immediately
Take both gas and electricity readings as soon as you hear your supplier has failed. Additionally photograph them with a timestamp and keep them somewhere safe.
Wait for contact from your new supplier
Your new supplier will contact you — usually within a week — with details of your new account. Furthermore check the Ofgem website for announcements about which supplier has been appointed.
Compare deals once settled
Once your account is transferred and your credit balance confirmed compare deals and switch to the best available tariff. You are not obliged to stay with the supplier of last resort and there are no exit fees.
What if I owe money to my old supplier?
If you owe money to your failed supplier the debt transfers to your new supplier. Consequently you will still need to repay it. However the new supplier cannot demand immediate repayment and must agree a reasonable repayment plan with you.
Furthermore if you were in debt to your old supplier this does not affect your right to switch to a different supplier later — as long as the debt is under £500 per fuel.
How to protect yourself in future
While the Ofgem process protects your supply and credit balance a supplier failure is still disruptive. There are some steps you can take to reduce the risk and minimise the impact:
✓ Choose financially stable suppliers — larger well-established suppliers are less likely to fail than smaller newer ones. Consequently check supplier reviews and financial health before switching.
✓ Don’t build up excessive credit — if your direct debit is set too high you accumulate large credit balances. Request a reduction if your credit exceeds one month’s bills.
✓ Keep meter readings up to date — regular meter readings mean your bills are accurate and your credit balance is based on real usage rather than estimates.
✓ Switch to a fixed deal with a reputable supplier — fixed tariffs from established suppliers give you price certainty and reduce exposure to both market volatility and supplier failure risk.
Related guides
How to switch energy supplier UK 2026 → Fixed vs variable energy tariffs explained → Ofgem confirms energy bills rising to £1,862 in July →Switch to a stable supplier and save money
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Compare energy deals →Written by the FastSwitch team · Last updated June 2026
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