Warning millions will struggle to pay

Millions of households in England and Wales will struggle to pay their water bills when they go up, a consumer watchdog has warned.

The water regulator, Ofwat, has provisionally said bills would rise by an average of £19 a year between 2025 and 2030 – a 21% increase over that period.

But in a survey of 9,500 households carried out by the Consumer Council for Water (CCW), some 18% said they were already struggling with bills and 40% said they would struggle to afford these rises.

Water companies said they were proposing an increase in support to struggling households to protect vulnerable customers.

Ofwat and water firms have been locked in tense negotiations over how much they will be able to charge for the five years from April next year.

In this major survey from the Consumer Council for Water (CCW), customers across 19 water company areas were presented with the proposed bill rises that were adjusted for inflation.

Some 40% of the 9,500 people asked said they would find bill rises difficult to afford. Of those:

• 54% said they would have to cut back on non-essentials to pay for it
• 43% said they would use less water
• 38% said they would cut back on food shopping and other essentials

While 75% of households surveyed supported their water companies’ plans for investment, that fell to 58% when they were reminded of the associated bill rises.

Mike Keil, chief executive of the CCW, said the bill increases would put an “intolerable strain” on the finances of millions of households.

“It’s quite frightening the extent to which water affordability is going to affect people in the future.”

He said a third of households under strain will cut back on essentials “like food shopping” in order to pay their water bill.

“That’s a situation we just can’t let happen,” he added.

Every water company has a scheme which can help reduce your bills if you are on a low income, but eligibility and support varies by company.

The CCW is calling for a single social tariff across England and Wales to end what it calls a “postcode lottery of assistance”.

Mr Keil said current support on offer for customers in the form of social tariffs was “completely inconsistent”.

“We are calling for the current system to be revamped and replaced with a much more fair system of social tariffs so it is consistent across England and Wales, which means that everyone who is struggling can be assured that that safety net is in place and support is there if they need it,” he said.

He says a single social tariff would be funded centrally and distributed where the need is greatest.

“Water companies committed back in 2019, as part of a public interest commitment, to end water poverty by 2030, and this single social tariff is the best way to do that,” he said.

Ofwat and the Environment Agency are still continuing with investigations into all water companies in England and Wales after sewage spills into England’s lakes, rivers and seas more than doubled in 2023.

Mr Keil said customers wanted to see investment but also “need to see evidence their money is being well spent” to repair trust in water firms.

Jonathan Sawers, 48, in Southampton pays Southern Water £600 a year.

The firm landed a £90m fine for dumping raw sewage in the sea, which its chief executive said came about because the company had not invested enough.

Ofwat has forecast Southern Water will put bills up by 44% and Mr Sawers told the BBC the extra “£200-£300 a year won’t just appear from nowhere”.

He said paying the water bill after constant increases has “been tough at times” that has put stress on his wife and children. He has just come out of arrears from previous bill rises, he added.

“Now with the possibility of a 44% increase to our bill so that Southern Water can pay the fine imposed by Ofwat, our bill could potentially be £900,” he said.

“Considering my latest pay offer is 1% per year over three years and along with the gas and electric hikes of the past couple of years it’s all looking a bit bleak”, he said.

In July, Ofwat provisionally said bills would rise by an average of £19 per year between 2025 and 2030 – totalling a £94 increase, or a 21% rise, over that five year period. That increase does not include inflation.

The bill hike varies by region with the regulator agreeing to a rise of 44% for Southern Water, and 11% for Northumbrian Water.

Since July, some companies have asked for further increases. For example, Thames Water, the UK’s largest water company, was given the go-ahead to lift bills by 23%. It has since said it needs to raise bills by 59%, in order to keep operating as normal.

The BBC understands Ofwat is considering permitting bigger bill increases for some companies when it makes a final decision in December, to reflect higher financing costs.

Responding to the CCW survey, Water UK, which represents the sector, said companies wanted to provide more help to customers struggling with bill rises.

“We urgently need investment in our water and sewage infrastructure,” a spokesman said.

He added the survey showed there was widespread public support for investment to secure water supplies and stop sewage spills.

“However, we understand increasing bills is never welcome,” he said.

Ofwat said it would “fully consider” the findings from the CCW research.

“It is also clear the majority of customers accepted the investment being proposed and the increase in bills needed to fund it, but it is crucial companies deliver the meaningful improvements this investment is designed to bring”, a spokesperson said.

“Performance in the past has not been good enough. This is the challenge the companies will need to meet in the years ahead – and we will be closely monitoring progress as they do.”