Household water bills will rise by an average of £94, or 21 per cent, over the next five years after regulator Ofwat signed off steep price hikes.
The increase in bills will pay for upgrades to pipes and reservoirs that water firms argue are sorely needed – but will also go towards paying investors.
Environment Secretary Steve Reed said this week that consumers would be ‘angry’ at the hikes to the cost of water.
The bill rises will take place from April 2025.
Ofwat has been locked in heated discussions with water firms this year about how much bills could rise by.
Water torture: Higher bills come amid outrage at waterways being polluted by sewage
Initially water firms wanted to increase bills from an average of £585 by 2030, an increase of 33 per cent.
Ofwat said no in July, and suggested a rise of 21 per cent, to £535.
Water companies then came out swinging in October and demanded bill increases averaging 40 per cent, with some asking for rises as high as 84 per cent.
Ofwat then went away to consider what to do before arriving at its decision today to allow rises of 21 per cent.
Four water firms successfully challenged Ofwat’s last price ruling in 2019, increasing customers’ bills by more than the regulator first determined.
Ofwat chief executive David Black said: ‘Our draft decisions on company plans approve a tripling of investment to make sustained improvement to customer service and the environment at a fair price for customers.
‘Let me be very clear to water companies. We will be closely scrutinising the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programmes.’
A survey by the Consumer Council for Water (CCW) in November found 18 per cent of customers are already struggling to afford water bills.
Forty per cent said they would find it difficult to afford a bill increase of 21 per cent, let alone any higher.
Matthew Topham, lead campaigner at We Own It, a group campaigning for public ownership of public services, said: ‘It’s utterly disgraceful that after 35 years of bonus scandals, sewage spills, and huge dividends, water firms are set to be rewarded by Ofwat with huge inflation-busting bill hikes.
‘Why should Brits have to cut back on food and other essentials, as many fear these hikes will require, to pay a privatisation tax to wealthy overseas shareholders?’
How to save money on water bills
Consider a water meter
Around 40 per cent of households in England and Wales not do not have a water meter, and some of these would save money on water bills by getting one fitted.
Getting a water meter is usually the best way of saving money on bills, for those that don’t use an above-average amount of water.
Not everyone will save with a meter, but water companies will usually give you two years to trial one and allow you to switch back if you are unhappy.
The CCW has a calculator that helps you understand if a water meter could save you money.
However, the rule of thumb is that a water bill could lower your bills if you live in a property with a high ‘rateable value’ (the formula used to set estimated water bills), do not use much water or live alone.
Use less water if you can
If you have a water meter fitted, using less water means paying lower bills.
Water bills for homes with these meters are made up of fees for water used, as well as daily standing charges.
But using less water also means lower energy bills, as much of the water homes use is heated first.
Check if you are eligible for a social tariff
Every water company in England and Wales has its own social tariff scheme designed to help customers on a low income.
But who is eligible and the level of support offered varies hugely from company to company. In some instances, bills can be reduced by as much as 90 per cent.
CCW has a list of social tariffs and criteria on its website.
For example, Thames Water’s social tariff is called Water Help.
It cuts water bills by 50 per cent for homes where this costs more than 5 per cent of their net income.
Almost two million homes – or 15 per cent – are eligible for water social tariffs but not signed up to one, according to the CCW.
Consider the WaterSure scheme
WaterSure is a Government programme run by water firms to discount bills for qualifying households in England and Wales.
To qualify, a household must be on certain benefits, such as Universal Credit, Pension Credit, Housing Benefit or income-related Employment and Support Allowance.
Most of the benefits on the list are for those on low incomes.
A household signing up to WaterSure will also need large amounts of water, either for medical reasons or because it has a lot of young children.
They must also either have a water meter fitted, or be on a waiting list for one.
WaterSure provides discounts to both the water and sewerage parts of a water bill.
To apply, you will need to fill in a form from your water company, and will likely need to prove you are on benefits and have a qualifying medical condition.
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