Millions of households are set to experience an increase in their water bills beyond the previously agreed amounts, as five water companies raised concerns with the competitions watchdog. Ofwat had initially permitted 16 water companies to raise bills by an average of £157 over a five-year span from 2025 to 2030.
However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contended that this allowance would not enable them to meet regulatory obligations. Upon appealing to the Competitions and Markets Authority (CMA), these companies sought approval for an additional £2.7 billion in revenue. Following an independent review, they were granted an extra £463 million.
This adjustment is anticipated to lead to an average 2.2% bill increase for customers. While this builds upon the previously approved 24% hike, it is less than the provisional 3% rise granted in October. The specific bill increases vary among providers, with South East Water permitted to raise bills by an extra 4% to £284 annually.
Meanwhile, Southern Water and Wessex Water will see bill increments of 3% to £641 and £614 per year, respectively. Anglian Water will have the opportunity to raise customers’ bills by an additional 2% to £602 yearly. On the other hand, Northumbrian Water will not implement further bill hikes. Collectively, these companies cater to around 14 million individuals.
While the CMA aimed to strike a balance between lessening the impact on households and ensuring sufficient funding for suppliers, a public body representing water consumers expressed concerns that the extra bill increases may surpass what many customers can bear. Additionally, water companies continue to face criticism over escalating bills alongside issues of leakages and untreated sewage discharges into water bodies.
Mike Keil, the chief executive of the Consumer Council for Water, emphasized the need for reform in the lengthy appeals process to empower customers to challenge price hikes akin to water companies. This, he argued, would rectify the existing power imbalance between companies and customers. Kirstin Baker, chair of the independent group, highlighted the decision to reject most of the requested bill increases while allowing limited additional funding where deemed necessary to balance affordability and sustainability goals.
The revised bill increments reflect the average yearly costs for customers. Though switching water companies may not be an option, simple actions like reducing water usage can have a substantial impact on bills. For instance, cutting down shower times and turning off taps when not in use can contribute to savings. Customers may also explore free water-saving devices available through organizations like Save Water Save Money, such as water-regulating shower heads and tap inserts. Additionally, installing a water meter, as recommended by financial expert Martin Lewis, can lead to cost savings, particularly for households with more bedrooms than occupants.