Long suffering households of five of England’s biggest water companies will have little choice to swallow yet more price rises
Millions of customers with five big water firms will be hit with more than £550million worth of extra bill hikes.
Industry regulator Ofwat had already agreed to allow Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water to land households with inflation-busting price rises of up to 48% between now and the end of this decade.
But the companies complained even that was not enough to find long overdue investment, and appealed to the Competition and Markets Authority.
Now an independent group of experts appointed by CMA has ruled that the firms can jack up their prices by more, though not as much as the suppliers wanted.
Who will be impacted by these even higher bills?
The CMA says the five companies concerned have more than seven million household and business customers, but that equates to around 15 million people in total.
How much will my water bill increase by now?
Firstly, thew CMA’s latest decision is provisional, so the companies could come back and ask for more. A final decision may not come until December, or into the new year.
Nevertheless, its panel of experts have said the five companies can raise bills by an additional 3% – about £12 per year on average – by 2030.
The actual amount that customers pay will depend on their usage and, to make things even more complicated, the CMA published figures based on where bills were in 2022/23 and projected what prices would by in 2030 without factoring in inflation between now and then.
Ofwat had already decided that Southern Water’s increase should be kept to 48% between now and then. Despite that, the company complained to the CMA that it should be allowed another 15% on top of that, taking its average annual bill to £710 in 2030, which would have been even higher still once inflation was taken into account.
The expert panel has now come back and said Southern’s price can rise by an extra 3%, to £638, but before inflation. Wessex Water wanted an extra 8% – on top of Ofwat’s announced 17% by 2030 – but the CMA said its average bill could go up another 5% to £622.
Anglian Water argued for additional 10% – which would have seen bills leap by 30% – but has provisionally been allowed to up bills by an extra 1%, to £599 a year, by 2030. Northumbrian Water complained that a 16% jump in prices too little, and lobbied to be allowed to up bills by 6% on top of that. The CMA panel settled on a 1% rise, to £495 a year.
The timing for when the extra bill increases will come depends on the CMA’s final decision. If it’s by December, then bills will start going up by more from next April. If it’s later then the increases could be delayed until the following year, by compressed into three years.
Why did the companies want even more money?
The water industry is suffering from decades of under investment. The firms often argue it’s because regulators haven’t allowed them big enough price rises in the past, but that has not stopped many dishing out vast amounts in dividends to investors, which has fuelled public anger.
The five companies argued that Ofwat’s decision left them unable to meet the regulatory requirements set out for them. Each of these companies chose to exercise its legal right to request a redetermination of Ofwat’s decision by an independent group of experts.
Are there any other companies asking for more money?
Thames Water, the country’s biggest supplier, is also unhappy about the bill increases announced by Ofwat. It has begun the process of appealing it to the CMA but the dire state of its finances mean it is tied up with what happens on that front.
I’m struggling with my water bill, what can I do?
Citizens Advice says one in five bill payers have battled to pay their water bill in the last year. More than two fifths (42%) of households facing problems have been pushed into cutting back on essentials such as energy and groceries, while over a third (35%) are rationing water as a result.
Citizens Advice is urging those in difficulty to talk to their water company as soon as they can. Your supplier should be able to offer guidance about reducing the cost of your water bill.
Most water companies have schemes for helping people pay their bills or helping with arrears. They might let you spread your payments over a longer period and in some cases, if you keep up with these payments, the water company will match the payments made so arrears go down more quickly.
Your water company can’t cut you off, but if you can’t make payments it’s important to tell them as soon as possible, as they can take you to court.
- Look into social tariffs. Social tariffs are discounted bills for water for low-income households. Ask your provider if they have a social tariff and whether you’d be eligible for it.
- Consider a water meter. Your water company should be able to give you guidance about whether you can get a water meter on your property and help you decide if it would be a cheaper option for you.
- Check out the WaterSure scheme. If you’re on a water meter and receiving benefits, have a medical reason to use more water or have a larger household you might be eligible for the WaterSure scheme. This means you won’t pay more than the average bill in your area. Your water supplier should be able to tell you if you’re eligible and how to apply.
- Find out about exemptions for disabled people. If you’re disabled, you might be eligible for certain discounts and schemes. Again, your water supplier should be able to help you get these, if you qualify.