Millions of households are set to experience an increase in their water bills beyond the previously agreed amounts due to complaints lodged by five companies with the competitions watchdog.
Initially, Ofwat had sanctioned a £157 average bill hike over a five-year span from 2025 to 2030 for 16 water companies. However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contested this decision, claiming it would impede their ability to meet regulatory obligations.
In response to the companies’ appeal, the Competitions and Markets Authority (CMA) conducted a review and granted them an additional £463 million in revenue out of the requested £2.7 billion.
This adjustment is anticipated to lead to an average 2.2% increase in customer bills. While this increment is on top of the previously approved 24% rise, it is lower than the initial 3% rise granted in October.
The specific bill increases vary among suppliers, with South East Water permitted to raise bills by 4% to £284 annually. Southern Water and Wessex Water will see a 3% increase to £641 and £614 per year, respectively. Anglian Water is allowed a 2% increase to £602 annually.
Northumbrian Water, on the other hand, will not implement further bill hikes. These five companies collectively cater to around 14 million individuals.
The CMA emphasized the importance of striking a balance between lessening the impact on households and ensuring suppliers have sufficient funding.
Despite the adjustments, a public body representing water consumers expressed concerns that the additional increases may still be unaffordable for many customers. Furthermore, water companies face growing scrutiny over escalating bills while incidents of leakages and untreated sewage continue to pollute water bodies.
Consumer Council for Water’s chief executive, Mike Keil, advocated for reforms in the appeal process to empower customers to challenge price increases, aiming to rectify the existing power imbalance between water companies and consumers.
Kirstin Baker, chair of the independent group overseeing the review, highlighted the rejection of most of the requested bill increases by water companies, while allowing limited extra funding where necessary to balance affordability concerns with ensuring water supply security and environmental protection.
These adjustments reflect market fluctuations since Ofwat’s original decision, ultimately impacting the average yearly bills for customers.
While switching water companies may not be an option, there are ways to save money, such as reducing water usage by implementing simple measures like shorter shower times and minimizing tap usage when not needed. Additionally, free water-saving devices can be obtained through initiatives like Save Water Save Money, including water flow-regulating shower heads and tap inserts.
Consideration of installing a water meter may also lead to cost savings, especially if the number of bedrooms in your household exceeds the number of occupants, as recommended by financial expert Martin Lewis.