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Several UK domestic energy suppliers are now on the verge of bankruptcy it seems, and seeking emergency loans from the government.

At this time of year almost all of their customers will be many hundreds of pounds in credit with them. That money is supposed to be protected, but still it's a bit of a worry.

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Some have already gone bust. I don't think the concern is the credit money, the problem is getting moved to another provider and instantly paying a higher rate than before.

Why are the suppliers struggling?

Customers have already agreed their tariff (how much they pay) with the supplier, since a massive spike like this wasn't predicted and the supplier is obligated to keep paying to supply their customers regardless of whether its at a loss some suppliers with limited capital reserves are quickly burning through them.

There's also a price cap for how much suppliers are legally allowed to sell their energy for in the UK (set by ofgem). If the price of energy exceeds this value, every supplier will be selling energy at a loss till ofgem increases the cap.

To get around this, most suppliers purchase their energy a few months in advance, but the ones who haven't will be in trouble currently.

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