Eon: is energy firm safe from going bust in the UK, what is Eon Next - and your rights as gas suppliers fold
E.ON have assured customers they are ‘here to stay’ - but what can you do if your supplier does unexpectedly collapse?
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These well established energy suppliers are often referred to as ‘the big six’.
They are the biggest energy providers and have been dominant in the sector for some time - but they are not adverse to change with many mergers taking place.
But while E.ON is considered to be one of the big six, does that mean it is immune to the uncertain future posed by the sudden rise in wholesale gas prices that threatens the UK sector?
Wholesale gas prices have risen 250% since January 2021 and 70% in August alone, according to data gathered by industry group Oil & Gas UK.
So could E.ON go bust? And what are your rights if it does?
Here is everything you need to know.
Could E.On go bust?
With rising wholesale costs of gas, energy companies have had to shoulder the financial strain in the short term due to the industry’s price cap.
The energy price cap, currently £1,138 a year but set to rise in October, is the maximum most households pay for gas on standard tariffs.
Smaller companies offering cheaper tariffs than competitors have been hit hardest, unable to pass this rise in costs to consumers and limited financial resources.
E.ON is actually a German company, one of the world's largest investor-owned electric utility service providers, operating in over 30 countries with over 33 million customers.
With E.ON commanding roughly 14% of the UK market share - the second biggest share in the UK - it is unlikely that the firm will be affected by the ongoing crisis so much as to have to cease operations.
With industry experts predicting as many as 60 energy companies could go to the wall in 2021, reducing the number of suppliers to as few as 10, the traditional industry heavyweights are likely to see their market share increase.
In fact, E.ON is actually taking on customers, as they are the new supplier to those who had accounts with HUB Energy, which collapsed on 9 August.
As smaller energy firms fold, more of their customers could be ported over to E.ON.
What is E.ON Next and could it go bust?
USwitch describes E.ON Next as a “renewable energy supplier that's part of the E.ON group.
“The supplier is a dedicated energy specialist offering 100% renewable electricity as standard, and no exit fees on its energy tariffs,” it says.
While a smaller arm of E.ON’s portfolio, it has the backing of one of the largest energy suppliers operating in the UK, so the chances of it collapsing are small.
Besides, with smaller companies, particularly those with an emphasis on renewable energy, enjoying a boost to their market share in recent years - including Bulb and Octopus - E.ON Next’s stock is likely to rise.
On 20 September, E.ON Next responded to a query on Twitter by saying “I can assure you we are here to stay”.
What are my rights?
While E.ON’s place in the market is fairly certain, the unexpected can happen, however unlikely it may be.
So what can you do if your energy provider goes bust?
The most important thing to remember is that even if your provider does collapse, you will not instantly lose access to gas and electricity; the lights won’t suddenly ‘go out’.
Households will not be without energy, and you will still receive gas and electricity under rules put in place by energy regulator, Ofgem.
Your account will be transferred to another energy provider but be warned that you may be placed on a more expensive tariff initially.
It is recommended that you take a note - or photograph - of your meter reading as soon as possible while you wait for the new supplier to make contact.
All money is protected so any credit you had with your previous supplier will be paid back. Equally, if you were in debt then that will still need to be paid back.
Citizens Advice says there is no need to cancel a direct debit straight away and recommends waiting for your new account to be set up with the new supplier before cancelling or changing.
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