Water bills to rise by 36%

Ofwat has announced that water bills are set to rise by an average of £31 per year (36%) over the next five years from April.

The water regulator has said the increase was enough for water companies in England and Wales to pay for upgrades and reduce sewage discharges. The increase is higher than the £19 per year from Ofwat previously proposed.

The regulator says that the bill increases would pay for a £104 billion upgrade for the sector.

The average bill increase by £157 (36%) over the next five years. The average bill increase in 2025-26 will be £86 (20%), excluding inflation, with smaller percentage increases in each of the next four years.

Ofwat has removed £8 billion (7%) of costs from companies’ business plans and reduced the allowed rate of return on investment compared with companies’ requests. This has led to a reduction in bills for most companies, compared with their most recent proposals; companies proposed bill increases of 44%. For example, in comparison with proposed 2029-30 bills, Southern Water’s bill has been reduced by £126 (16%), Thames Water by £79 (12%), Hafren Dyfrdwy by £73 (12%) and Wessex Water by £44 (7%).

Ofwat says that bills have been set at a level which is fair for current and future customers, with steps taken by companies to increase support for customers who need it, meaning more than a doubling in the proportion of customers that will receive help with their bills from 4% to 9%.

David Black, Ofwat Chief Executive, said “Today marks a significant moment. It provides water companies with an opportunity to regain customers’ trust by using this £104bn upgrade to turn around their environmental record and improve services to customers.

“Water companies now need to rise to this challenge, customers will rightly expect them to show they can deliver significant improvement over time to justify the increase in bills. Alongside the step up in investment, we need to see a transformation in companies’ culture and performance. We will monitor and hold companies to account on their investment programmes and improvements.

“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. This has seen us remove £8bn of unjustified costs compared with companies most recent requests. In addition, our approach to setting a rate of return has saved customers £2.8bn.”

Morgan Vine, Director of Policy at Independent Age said “Today we found out that water bills will be rising more than first feared, as Ofwat confirmed there will be significant increases in England and Wales from next year. This 36% increase will be an extremely tough pill to swallow for older people across the country living in financial hardship. Polling we commissioned in October revealed the widespread anxiety felt by many people in later life regarding their water bills, with 66% of older people (65+) in England with an income of under £15,000 saying they would find it difficult to manage a 20% increase to their water bill.

“Living in water poverty can be an isolating and miserable experience and the older people we speak to have already been forced to make drastic cutbacks. For many, the reality is not showering every day, leaving bedding and clothes dirty to save on laundry and not always flushing the toilet. We live in the sixth richest nation, these aren’t decisions people in later life should be forced to make.

“All water companies provide some form of financial support, but there is an unfair and confusing postcode lottery, consumers can’t shop for a provider and are faced with a patchwork of different schemes with varying eligibility criteria and fluctuating discounts in place.  The UK Government must intervene to support those struggling to afford their water bills and introduce a single social tariff for water for England and Wales. A person’s address shouldn’t determine the level of support they receive towards essential bills, and nobody in later life should have to limit their water usage just to get by.”

Tom MacInnes, Director of Policy at Citizens Advice, said “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.”

Water and wastewater companies – average bills for 2024-25 and 2029-30

Company	2024-25 average bill	Company’s most recent bill proposal		Final Determination
		2029-30 average bill	% increase	2029-30 average bill	% increase
Anglian Water	491	649	32%	631	29%
Dŵr Cymru	455	660	45%	645	42%
Hafren Dyfrdwy	392	629	61%	557	42%
Northumbrian Water	422	524	24%	510	21%
Severn Trent Water	398	612	54%	583	47%
Southern Water	420	768	83%	642	53%
South West Water	497	624	26%	610	23%
Thames Water	436	667	53%	588	35%
United Utilities	442	603	36%	585	32%
Wessex Water	508	658	30%	614	21%
Yorkshire Water	430	627	46%	607	41%
Water and wastewater companies – average	440	635	44%	597	36%

Water-only companies – average bills for 2024-25 and 2029-30

Company	2024-25 average bill	Company’s most recent bill proposal		Final Determination
		2029-30 average bill	% increase	2029-30 average bill	% increase
Affinity Water	192	246	28%	241	26%
Portsmouth Water	111	148	33%	152	37%
South East Water	232	331	43%	287	24%
South Staffs Water	161	188	17%	195	21%
SES Water	221	241	9%	215	-3%
Water-only companies – average	192	248	29%	234	22%