Tomato Energy Collapse: What 23,000 Customers Need to Know About Their Next Steps

Tomato Energy’s Collapse Leaves Thousands Awaiting Answers

It’s a scenario that’s become all too familiar in recent years. Tomato Energy, a small but ambitious energy supplier based in Basingstoke, has gone bust—leaving over 23,000 homes and businesses in a state of limbo. The company’s financial troubles, which included mounting debts and a hefty £1.5 million regulatory fine, have forced it to shut its doors for good. Now, customers are left wondering: what happens next?

According to GB News and Evening Standard, the company’s collapse affects roughly 15,300 households and 8,400 business accounts. In the wake of the failure, the UK’s energy regulator, Ofgem, has stepped in to ensure that the lights stay on and that nobody is left out in the cold. Ofgem’s ‘supplier of last resort’ system will automatically transfer affected customers to a new provider, safeguarding both their energy supply and any funds held in their accounts.

Why Did Tomato Energy Fail?

Tomato Energy’s troubles didn’t start overnight. In April, the company was banned from taking on new customers after it accumulated £3 million in debt. That was a red flag for industry observers, but the situation only worsened. By October, the company filed notice of its intention to appoint administrators—a formal signal that it was seeking emergency help to stave off collapse.

The final blow came when Ofgem announced a £1.5 million fine for failing to maintain adequate liquidity. These rules aren’t just bureaucratic hurdles—they’re meant to ensure that energy companies can meet their financial obligations, even when market conditions change unexpectedly. Tomato Energy’s inability to comply sealed its fate.

Industry insiders point out that smaller suppliers like Tomato Energy often offer cheaper deals to attract customers, but their business models can be fragile. When wholesale energy prices surged during the recent energy crisis, many such companies found themselves unable to cope. In fact, more than 30 suppliers collapsed in under a year, affecting millions of households.

What Happens to Tomato Energy Customers Now?

For those affected, the first question is whether their gas and electricity will keep flowing. Ofgem has made it clear: customers should not worry about immediate disruptions. “They will not see any disruption to their energy supply, and any domestic customers’ credit balances remain protected under Ofgem’s rules,” said Rohan Churm, director for financial resilience and control at Ofgem.

However, there are important steps for customers to follow. Ofgem recommends taking a meter reading as soon as possible—this will help ensure accurate billing when a new supplier takes over. Customers are also advised not to switch suppliers until Ofgem appoints the new company. Once the transition is complete, customers will be automatically placed on a ‘deemed’ contract with their new provider. These contracts can be more expensive than the previous deals, but they come with a silver lining: you can leave at any time without penalty.

After the handover, customers will be contacted directly by their new supplier. At that point, they can request to be moved to the cheapest available deal or shop around for a better offer elsewhere. Ofgem’s energy price cap will continue to protect household customers, keeping rates in check.

The Bigger Picture: Financial Resilience and Consumer Protection

Tomato Energy’s collapse is the latest in a series of failures that have rocked the UK energy market. Rebel Energy went bust earlier this year, and names like Bulb, Zog Energy, and Orbit are also on the list of casualties. These events have exposed vulnerabilities in the sector, particularly among smaller companies.

In response, Ofgem has tightened its regulations. Suppliers are now required to hold a financial safety buffer and to ring-fence certain areas of their finances, such as customer balances. These measures are designed to prevent future collapses and to ensure that, when failures do happen, customers are protected from the fallout.

Jonathan Churm, an Ofgem spokesperson, summed it up: “We have worked hard to improve the financial resilience of suppliers in recent years, implementing a series of rules to make sure they can weather unexpected shocks. But like any competitive market, some companies will still fail from time to time. Our priority is making sure consumers are protected if that happens, and that any associated costs are minimised.”

For Tomato Energy employees—about 100 people—the future is uncertain. As administrators take over, decisions will be made about whether the business can be salvaged in any form or if it must be wound down completely.

Looking Ahead: Lessons for Customers and the Industry

Tomato Energy’s downfall offers important lessons for both consumers and the industry at large. For customers, it’s a reminder to stay informed and proactive. Keeping meter readings up to date and understanding the terms of energy contracts can help avoid unpleasant surprises if a supplier goes bust. For the industry, the episode reinforces the need for robust financial safeguards and transparent practices.

Meanwhile, the energy market continues to evolve. While smaller suppliers can offer competitive rates, customers must weigh the risks against potential savings. The regulatory landscape is changing, with Ofgem keeping a close eye on financial resilience and consumer protection.

As for the 23,000 Tomato Energy customers now waiting for news, patience is key. The transition process may take several days, but Ofgem has promised that nobody will be left without power—and that balances and payments will be protected.

Tomato Energy’s collapse is a stark illustration of the challenges facing smaller energy suppliers in a volatile market. While regulatory reforms have made the system safer for consumers, the episode underscores the importance of vigilance—both from industry watchdogs and from customers themselves. The lesson? Stability in energy provision depends on strong financial foundations and swift, transparent action when things go wrong.