The regulator confirmed this morning that it would allow water suppliers to increase bills to fix the “twin crisis” of pollution and water shortages
Water suppliers will hike bills by over 36% over the next five years as Ofwat approves a plan to help “clean rivers and secure long-term drinking water supplies”.
The regulator confirmed this morning that it would allow water suppliers to increase bills to address the “twin crisis” of pollution and water shortages. The average rise will be around 40%, which is equivalent to an average extra of £31 per year – or an average of £157 over five years, and will be £597 by 2030. The rises are set to come in next year, and the average bill increase will be £86 according to Ofwat.
The increase is bigger than the 21% rise that Ofwat first proposed in July. However, the regulator says the level is “fair” for current and future customers. Alongside the hike, water suppliers will also be “doubling” the proportion of customers that will receive help from their bills from 4% to 9%.
The biggest hike will be seen by customers of Southern Water, who are set for a 53% hike to their bills over the next five years. Currently, Southern Water customers have an average bill of £420 – but in five years time this will have risen to £642. Paying the most every year in five years’ time will be Dwr Cymru customers with an average annual bill of £645.
Scandal-hit Thames Water – which is currently in the midst of a major £3billion bailout from creditors – will be hiking bills by 35% from an average of £436 a year to £588 for 16million of its customers.
Customers of Wessex Water will have the lowest, 21%, bill rise. The only customers who will see their annual bill drop in 2030 will be from SES Water – a water only company – who will be reducing their bills by 3% over the next five years. This would take the average bill from £221 a year to £215.
Ofwat chief executive David Black said, “We recognise it is a difficult time for many, and we are acutely aware of the impact that bill increases will have for some customers. That is why it is vital that companies are stepping up their support for customers who struggle to pay.
“We have robustly examined all funding requests to make sure they provide value for money and deliver real improvements while ensuring the sector can attract the levels of investment it needs to meet environmental requirements.”
It comes amid public anger over sewage discharges into waterways and a continuing squeeze on household finances. However, the regulator says the bill increases would help pay for a £ 104 billion upgrade for the sector.
Writing in the Telegraph at the weekend, Environment Secretary Steve Reed said: “We are facing this twin crisis of water pollution and water shortages because the Conservatives refused to invest to upgrade crumbling water infrastructure. Instead, they let water companies divert customers’ money to line the pockets of their executives and shareholders.”
He wrote: “The public are right to be angry.” The environmental secretary reiterated this message this morning, adding that the Labour government would “clean up our rivers, lakes and seas for good”.
Consumer groups have expressed concern that many households will not be able to afford a sharp rise in water bills and have urged water companies to provide more support. Mike Keil, chief executive of the Consumer Council for Water (CCW), noted that at least two in five households would struggle to cover these hikes.
He added: “Companies’ existing plans fall short of meeting the commitment they previously made to end water poverty in England by 2030, and Ofwat should push them harder to deliver on this.”
Tom MacInnes, Director of Policy at Citizens Advice, commented: “These price rises will hit many households hard. While it’s encouraging to see help for customers increasing, the current dysfunctional approach to bill support in this industry means that people will continue to miss out.
“Ending the postcode lottery for water social tariffs – cheaper rates for those who need them – is an essential step to shield those struggling to keep pace with rising bills. We found that more than two fifths (42%) of those likely to be eligible aren’t aware that water social tariffs exist. The government and suppliers must work together to ensure that no one is missing out on the support they’re entitled to.”
However, industry body Water UK has estimated that water bills would be £110 or 25% higher today had they kept pace with inflation. A spokesperson for the firm said: “Water companies want to invest a record £108 billion to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers and seas. We await Ofwat’s decision tomorrow and hope they give us the green light so we can get on with it.
“However, we understand increasing bills is never welcome. To protect vulnerable customers, companies have proposed increasing the number of households receiving support with their bills to three million over the next five years.”
Full list of water bill rises
Water and wastewater companies (percentage of how much bills will rise)
- Anglian Water – 29% – (2024: £491 – 2030: £631)
- Dŵr Cymru – 42% – (2024: £444 – 2030: £645)
- Hafren Dyfrdwy – 42% – (2024: £392 – 2030: 557)
- Northumbrian Water – 21% – (2024: £422 – 2030: £510)
- Severn Trent Water – 47% – (2024: £398 – 2030: £583)
- Southern Water – 53% – (2024: £420 – 2030: £642)
- South West Water – 23% – (2024: £497 – 2030: £610)
- Thames Water – 35% – (2024: £436- 2030: £588)
- United Utilities – 32% – (2024: £442 – 2030: £586)
- Wessex Water – 21% – (2024: £508 – 2030: £614)
- Yorkshire Water – 41% – (2024: £430 – 2030: £607)
Water-only companies
- Affinity Water – 26% – (2024: £192 – 2030: £241)
- Portsmouth Water – 37% – (2024: £111 – 2030: £152)
- South East Water – 24% – (2024: £232 – 2030: £287)
- South Staffs Water – 21% – (2024: £161 – 2030: £195)
- SES Water – (-3%) – (2024: £221 – 2030: £215)
