Millions of households are set to experience higher water bills than initially approved as five companies have raised concerns with the competition watchdog. Ofwat had previously sanctioned 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 contested this decision, claiming it would hinder their compliance with regulatory standards.
Following their plea to the Competitions and Markets Authority (CMA) to increase revenue by £2.7 billion, an independent review resulted in an additional allowance of £463 million. This adjustment is anticipated to lead to a 2.2% average increase in customer bills, on top of the already approved 24% rise, albeit lower than the provisional 3% hike granted in October.
The bill increments vary among suppliers, with South East Water permitted a 4% increase to £284 annually. Southern Water and Wessex Water will up bills by 3% to reach £641 and £614 respectively, while Anglian Water can raise customer bills by an additional 2% to £602 annually. Northumbrian Water, on the other hand, will not further increase bills. These companies collectively serve around 14 million individuals.
The CMA emphasized the importance of striking a balance between lessening the impact on households and ensuring suppliers have adequate funding. Nevertheless, a public body advocating for water consumers expressed concern that the additional bill hikes are still beyond the means of many customers.
Consumer dissatisfaction with escalating bills persists as water companies face criticism for leakages and untreated sewage discharge into water bodies. The Chief Executive of the Consumer Council for Water, Mike Keil, highlighted the challenges some households face due to these bill increases, calling for a reform in the appeals process to empower customers to challenge price hikes.
Chair of the independent group, Kirstin Baker, stated that most of the requested bill increments were rejected, allowing only limited extra funding where essential, to balance affordability concerns with water supply security and pollution reduction. The adjustments in bills represent changes reflecting market dynamics subsequent to Ofwat’s initial decision.
The revised bill amounts indicate the average yearly cost for customers. While switching water companies is not an option, there are ways to save money by conserving water. Simple measures like reducing shower time by a minute or turning off taps when not in use can translate into substantial savings. Additionally, individuals can explore free water-saving devices through Save Water Save Money and consider installing a water meter as advised by Martin Lewis for potential savings.
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