Millions of households are set to experience an increase in their water bills beyond the previously approved amounts as five water companies raised concerns to 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.
Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contended that adhering to the initial decision would hinder their compliance with regulatory obligations. These firms sought approval from the Competitions and Markets Authority (CMA) to generate an additional £2.7 billion in revenue. However, following an evaluation by an independent panel, they have been granted an extra £463 million.
The adjustments are anticipated to lead to an average bill increase of 2.2% for customers, in addition to the previously allowed 24% hike. Nonetheless, this new increase is lower than the provisional 3% rise granted in October. The extent of the bill increments varies across suppliers. For instance, South East Water can raise bills by an extra 4% to £284 annually.
Southern Water and Wessex Water will up bills by 3% to £641 and £614 per year, respectively. Anglian Water is authorized to boost customers’ bills by a further 2% to £602 annually, but Northumbrian Water will refrain from further bill escalations. Collectively, these companies cater to around 14 million individuals.
The CMA stated its aim to strike a balance between lessening the impact on households and ensuring adequate funding for suppliers. However, a public body representing water consumers expressed concerns that the additional bill increases were still burdensome for many customers.
Water companies are facing increasing criticism over rising bills while incidents of leakages and untreated sewage discharges into water bodies persist. Mike Keil, the chief executive of the Consumer Council for Water, emphasized the need for reform in the appeal process to empower customers to challenge price hikes, addressing the existing power imbalance between water companies and consumers.
Chair of the independent group, Kirstin Baker, highlighted the rejection of most bill increase requests by water companies but acknowledged the approval of limited additional funding where genuinely necessary, considering affordability concerns alongside water supply security and pollution reduction.
The average yearly bills for customers post these adjustments are as follows. While switching water companies is not an option, there are ways to save money by conserving water. Simple actions like shortening shower times by a minute or turning off taps when not in use can make a significant impact on bills. Additionally, free water-saving devices can be obtained from Save Water Save Money, including water-regulating shower heads and tap inserts based on location. Considering a water meter, as suggested by Martin Lewis, could lead to savings, especially if there are more bedrooms in the house than occupants.
