GB Energy goes bust, Co-op Energy to take over: here's what you need to know

Here are the key need-to-knows:

• Your energy supply will continue as normal.

• Co-op Energy has taken over as supplier to all of GB Energy's 160,000 customers as of 00.01am on Wednesday 30 November.

• Ofgem says you'll continue to pay the same price you did with GB Energy, whether you were on a fixed or standard tariff, and if you're on a fix you can keep it.

• All outstanding credit balances for current and past GB Energy customers will be honoured. This cost, which is thought to be around £25 million, will be picked up partly by Co-op Energy and partly by Ofgem's new 'safety net', with a levy across all energy suppliers.

I'm a GB Energy customer – what should I do?

You don't need to do anything at the moment. You'll be automatically moved over and supplied by Co-op Energy from 30 November. Ofgem says you should wait until Co-op Energy contacts you before doing anything, though if you have any urgent questions you can call the Co-op Energy helpline on 0800 6444 451.

Will I keep my tariff?

Yes. Despite initial fears that replacement tariffs with a new supplier would be much more expensive, Ofgem has confirmed the GB Energy tariff you're currently on will remain the same under Co-op Energy, in terms of the rate you pay and the length of your fix, if you're on one.

Co-op Energy chief executive Ben Reid has told MoneySavingExpert.com that when former GB Energy customers reach the end of their fixed deals, he hopes to offer a tariff with "competitive rates" – this won't be an existing Co-op Energy tariff but a separate one created just for former GB Energy customers.

What if I've already cancelled my direct debit – will I still move to Co-op Energy?

Ofgem's advice after GB Energy went bust on Saturday was that customers shouldn't cancel direct debits. But some customers have told us they've taken the decision to cancel their direct debits anyway.

If you've cancelled your direct debit but not switched away from GB Energy, Co-op Energy will become your new energy supplier. Assuming you want to continue on your existing tariff, contact Co-op Energy on 0800 644 4451 to reinstate your direct debit.

My account's in credit – will I get my money back?

You're not alone – we've heard from lots of customers in this situation – and the good news is you won't lose your money. Co-op Energy says it will honour all outstanding credit balances, both for current customers and for past customers still owed money. If you're a current customer, any credit on your account will be used to offset future energy use. You'll be contacted by Co-op Energy over the coming days with more information about your tariff and current credit balance.

Early calculations by Ofgem put the cost of protecting customers' balances at around £25 million. That will be partly met by Co-op Energy, but Co-op Energy boss Ben Reid told us "the majority" will be covered by the 'safety net' put in place by Ofgem, which involves a levy on all energy suppliers (see more on this below).

I've switched away from GB Energy – will I get my credit balance back?

If you've switched away from GB Energy and are in credit to it, you'll have what's called a 'closed account balance' – Co-op Energy has confirmed it will refund these.

However, to ensure you're paid back what you're owed following your switch you should contact the Co-op Energy customer contact team on 0800 644 4451.

I decided to quit GB Energy when I heard about it going bust – will my switch still go through?

We've heard of some people switching away from GB Energy over the weekend when they learned it had ceased to trade.

Ofgem told us it's advised other energy suppliers to carry on as normal and allow GB Energy customers to switch to them. It says any switches currently in progress should still go ahead as normal.

What if I'm in the middle of a switch to GB Energy?

This should also go ahead as normal and you will end up being supplied by Co-op Energy on the tariff you initially signed up for.

What if my GB Energy account is in debt – do I still need to pay?

While Ofgem says you won't be required to pay off the debt to Co-op Energy, you may still need to pay GB Energy. Ofgem says further details will be provided by GB Energy's appointed administrator in due course – so bear that in mind in terms of future budgeting.

So should I stay with Co-op Energy?

It's up to you to work out whether or not you can get a better deal elsewhere – our Cheap Energy Club can help on that front.

If you're on a fix you may struggle to find better value at another supplier, but those on a standard variable tariff should be able to sniff out a better deal quite easily – especially since GB Energy cranked up its rates by 30% in August.

It's also important to bear in mind that Co-op Energy has previously struggled in terms of customer service – it was the most complained-about energy supplier in the third quarter of last year (a result it blamed on ongoing problems with its new IT system) and it also fared poorly in MSE's recent poll.

Meanwhile, in October it was announced that hundreds of thousands of Co-op Energy customers would get a share of £1.8 million compensation after Ofgem identified problems with the firm's complaints resolution, call handling and billing processes.

Ofgem has appointed Co-op Energy as new supplier to affected customers

Martin's message: 'Seems to be a good result'

MSE founder Martin Lewis says: "It's not something I've often said before, but plaudits to Ofgem for sorting this so swiftly and what so far seems to be a good result for consumers.

"The things we previously knew that weren't protected were people's existing tariffs and whether they would be maintained, and they have been, and whether people that had left recently would get their credit back, and they will.

"We now have to hope that the transition goes smoothly. I do have some minor concerns that over the past few years Co-op Energy has not had the best customer service reputation – indeed in our November poll, 56% rated it 'poor'.

"It has to be said, some of this is legacy issues from when it changed its billing system so hopefully things will not be too bad – if it is, then the best advice is to ditch and switch. That said, you may as well give it a chance if its price is cheap.

"What I would suggest is that those who are on cheap fixes with GB Energy will probably be unable to save by switching elsewhere, because it was so price-competitive. If you're on its variable tariff, then that isn't as cheap and you could probably find that you could save money by doing a comparison and switching elsewhere."

What is the Ofgem safety net and how does it work?

The collapse of GB Energy comes just a month after Ofgem introduced its new safety net, which is designed to protect customers' money in the event a supplier goes out of business.

The safety net allows the appointed supplier (in this case, Co-op Energy) to recover the cost of credit balances via a levy across all energy suppliers. This is the first time the levy has been used.

Ofgem says it thinks it's unlikely suppliers will pass on the extra cost to customers, but if they do, while exact figures aren't available in this case, the cost is estimated to be less than £1 per customer.

What guarantees are there of Co-op Energy's stability?

Co-op Energy is a small supplier and not one of the big six firms. But it is owned by the largest independent co-operative in the UK, Midcounties Co-operative.

When asked how his company can afford to honour GB Energy deals, Co-op Energy chief executive Ben Reid told us Midcounties Co-op is a "significant business" which has been around for 160 years and that taking over GB Energy "is not a challenge to our cash flow at all".

Should I switch my energy supplier and is it safe to do so?

Switching your supplier can save you £100s on energy bills – and right now, every day's delay in doing so costs.

Last week we warned that the cheapest energy deals for someone on typical usage had gone up from £724/yr to £822/yr since May – now, as more of them have been pulled, it's £863/yr. And with wholesale prices (what energy firms pay for gas and electricity) skyrocketing, we don't see any reason why it won't be even higher by next week.

So do a five-min energy comparison ASAP, lock in to a cheap fixed rate and save yourself hundreds – before savings are eroded further.

It's important to understand that switching your energy supplier is perfectly safe to do.

In the rare event of a supplier going bust – as has happened with GB Energy – customers are protected by Ofgem's safety net, meaning your energy supply is guaranteed and your credit balance is safe.

Additional reporting by Faye Lipson.