Millions of households are set to experience an increase in their water bills beyond the initially agreed amounts due to complaints from five companies to the competitions watchdog.
Previously, Ofwat had permitted 16 water companies to raise bills by an average of £157 over a five-year span from 2025 to 2030. However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contested this decision, citing difficulties in meeting regulatory obligations.
Following their appeal to the Competitions and Markets Authority (CMA) for approval to generate an additional £2.7 billion in revenue, an independent review granted them an extra £463 million. This adjustment is expected to result in an average bill increase of 2.2% for customers, on top of the previously approved 24% rise, though less than the 3% increment initially proposed in October.
The bill hikes vary among suppliers, with South East Water allowed a 4% increase to £284 annually, while Southern Water and Wessex Water will up bills by 3% to £641 and £614 per year respectively. Anglian Water will raise customer bills by an additional 2% to £602 yearly, whereas Northumbrian Water will maintain current billing levels. Collectively, these companies serve around 14 million people.
The CMA aimed to strike a balance between lessening the impact on households and ensuring sufficient funding for suppliers. Nonetheless, a public body representing water consumers expressed concerns that the increased bills may surpass what many customers can afford.
Amidst growing discontent over escalating bills and environmental issues, including leakages and untreated sewage entering water bodies, there is a call for the reform of the lengthy appeals process to empower customers to challenge price hikes.
Kirstin Baker, chair of the independent group, highlighted the decision-making process that considered affordability concerns alongside the necessity to safeguard water resources and reduce pollution. The adjustments in bill amounts reflect market changes since Ofwat’s initial decision.
Although customers cannot switch water providers, there are opportunities to save money by conserving water through small lifestyle changes, such as reducing shower time and utilizing water-saving devices. Additionally, installing a water meter could lead to savings, especially for households with more bedrooms than occupants.