Millions of households are set to experience an increase in their water bills beyond the previously agreed amounts due to complaints from five companies to the competitions watchdog. Ofwat had initially permitted 16 water companies to raise bills by an average of £157 over a five-year period spanning from 2025 to 2030.
However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water voiced concerns that the approved increment would hinder their ability to meet regulatory standards. Following their appeal to the Competitions and Markets Authority (CMA) to generate an extra £2.7 billion in revenue, an independent review led to an allowance of an additional £463 million.
This adjustment is anticipated to lead to an average bill increase of 2.2% for customers. While this adds to the previously approved 24% rise, it is lower than the provisional 3% uptick granted in October. The specific bill increases vary among suppliers, with South East Water authorized to raise bills by an extra 4% to £284 yearly.
Southern Water and Wessex Water will implement a 3% increase to £641 and £614 annually, respectively. Anglian Water will be able to impose a further 2% raise on customers, bringing bills to £602 per year. In contrast, Northumbrian Water will not pursue additional bill hikes. These companies collectively serve around 14 million people.
The CMA emphasized the importance of balancing the impact on households with ensuring sufficient funding for suppliers. However, a public body advocating for water consumers expressed concerns that the added bill increases might exceed what many customers can afford. Despite the ongoing discontent over escalating bills, water companies are grappling with issues such as leakages and untreated sewage discharge into water bodies.
As per Mike Keil, the chief executive of the Consumer Council for Water, the approved bill increases, while below the companies’ requests, may still strain the budgets of many customers. He called for reforms in the appeal process to empower customers to challenge price hikes effectively, addressing the existing power imbalance between water companies and consumers.
Kirstin Baker, chair of the independent group, highlighted the rejection of most of the requested bill increases while permitting limited extra funding where essential. This decision aimed to balance concerns about affordability with the necessity to secure water supplies and reduce pollution, with the extra funds reflecting market dynamics since Ofwat’s initial decision.
The adjusted average yearly bills for customers are as follows, showcasing the varying impacts across different suppliers. While customers cannot switch water providers, they can still save money by conserving water through simple measures like reducing shower time and using water-saving devices. Opting for a water meter, as suggested by Martin Lewis, could also lead to cost savings, especially in homes with more bedrooms than occupants.