Millions of households are set to experience an increase in their water bills beyond the initially agreed amounts as five companies have raised concerns with the competitions watchdog.
Previously, Ofwat had permitted 16 water companies to raise bills by an average of £157 over the span of five years, from 2025 to 2030. However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water argued that this allowance would not enable them to meet regulatory obligations.
Following the companies’ appeal to the Competitions and Markets Authority (CMA) to augment their revenue by £2.7 billion, an independent review resulted in an additional allowance of £463 million.
As a consequence, customers are expected to face an average bill increase of 2.2%. This adjustment supplements the existing 24% rise already permitted but falls short of the provisional 3% increase granted in October.
The specific bill increases vary across suppliers. South East Water has been given approval to raise bills by an extra 4% to reach £284 annually. Meanwhile, Southern Water and Wessex Water will increase bills by 3% to £641 and £614 per year, respectively. Anglian Water will implement a 2% rise, bringing customers’ bills to £602 annually.
Northumbrian Water, however, will not further escalate bills. Collectively, these companies serve around 14 million individuals.
The CMA emphasized the importance of striking a balance between mitigating the impact on households and ensuring adequate funding for the suppliers. Despite this, a public body representing water consumers expressed concerns that the additional bill hikes may exceed the affordability threshold for many customers.
Moreover, water companies are facing growing criticism over escalating bills while environmental issues like leakages and untreated sewage discharge persist. Mike Keil, the chief executive of the Consumer Council for Water, highlighted the need for reform in the appeal process to empower customers to challenge price increases, addressing the existing power imbalance between companies and customers.
Kirstin Baker, chair of the independent group overseeing the review, stated that while most of the requested bill increases were rejected, limited additional funding was granted where necessary to balance affordability concerns with ensuring water supply security and pollution reduction.
Lastly, the average yearly bill increases for customers were outlined, emphasizing the importance of conservation efforts to reduce water consumption and potentially lower bills.