Your guide to the energy crisis + free FAQ templates for your tenants and landlords

22 September 2021

Record increases in energy bills have caused 21 suppliers to collapse since the start of September, impacting more than 3.7 million households. Here's your guide to the ongoing energy crisis, including the Energy Price Cap, government support available for tenants, and downloadable FAQs for your landlords and tenants.

The UK has been gripped by an emerging energy crisis: wholesale gas prices increased by 250% between January and September 2021 alone, according to the Oil & Gas UK trade body. Fifty-one suppliers have collapsed since the beginning of 2021, impacting more than 3.7 million households throughout the UK. The industry has shrunk to 22 suppliers, down from around 70 at the start of 2021.

Now, fears are escalating that energy prices could soar to unaffordable levels for both everyday consumers and industry, leading the government to engage in crisis talks with the regulator, Ofgem, and key industry leaders. 

➡️ Download a free FAQ on the energy crisis for your tenants
➡️ Download a free FAQ on the energy crisis for your landlords

Why is there an energy crisis?

A combination of factors have contributed to the current crisis. Demand for gas has soared globally as the world recovers from the pandemic, compounded by a cold winter in 2020-2021 that left gas supplies depleted, with stores at a five year low.

Smaller energy companies have warned they'll go out of business if they can't pass on the rising costs to customers, according to the BBC.

More than 22 million households in the UK are connected to the gas grid, according to the government, and in 2020, 38% of the country's gas demand was used for domestic heating, 29% for electricity generation and 11% for industrial and commercial use.

What should I say to tenants who are concerned about their energy bills?

Advise them to check who their supplier is and what tariff they are currently on using a recent energy bill. If they are on a standard variable tariff or prepayment meter, they will be subject to the next Energy Price Cap increase on 1 October 2022.

If possible, Ofgem recommends "shopping around for a better deal". If they're on a fixed rate tariff, the price per unit of energy used is locked in for a specific period, usually 12 or 24 months, they are probably best to remain on it until the end of their contract. 

How will the increase to the Energy Price Cap affect my tenants?

In 2019, an Energy Price Cap was introduced to protect customers on standard variable tariffs, which is usually a supplier's most expensive tariff, and is reviewed twice a year.

The price cap on most standard variable tariffs was already increased on 1 October 2021, and again by 54% on 1 April 2022. Those on standard variable tariffs paying by direct debit saw an average increase of £693 from £1,227 to £1,971. Prepayment customers saw an average increase of £708 from £1,309 to £2,017.

The government and Ofgem have asserted in a joint statement that the Energy Price Cap will not be suspended.

What happens if my tenants' energy supplier goes bust?

They will not find themselves without power.

The government and Ofgem have stated that the current crisis "is not an issue of supply" and "the United Kingdom benefits from having a diverse range of gas supply sources with capacity that can more than meet demand."

Instead, Ofgem will appoint a "Supplier of last resort" and customers of the failed supplier will be switched to the new supplier on a new "deemed" contract, with energy supplies will continue as normal as they are switched over. 

If the energy supplier goes bust while you have a change of tenancy, you should make a note of the date and meter readings. The supplier appointed to take over supply will be responsible for billing accounts from the day the supplier goes bust.

The new supplier will be responsible for ensuring any credit on the account is honoured, while the failed supplier will bill for any owed amounts. 

➡️ See failed suppliers and their replacements with our Energy Supplier Tracker

Is there support available for poorer households?

Government support is available for low income and fuel-poor households struggling with their energy bills.

This includes the Warm Home Discount, which provides eligible households with a £140 discount, and Winter Fuel Payments and Cold Weather Payments, which "will help ensure those most vulnerable are better able to heat their homes over the colder months".

The emergency measures that were agreed between government and energy suppliers to support those most in need during Covid-19 will also remain in place this winter.

Further reading