Millions of households are set to experience an increase in their water bills beyond the previously agreed amounts due to complaints filed by five companies to the competitions watchdog. Ofwat had initially permitted 16 water companies to raise bills by an average of £157 over the 2025-2030 period.
However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contested that this approval would impede their ability to fulfill regulatory obligations. Consequently, these companies sought approval from the Competitions and Markets Authority (CMA) to generate an additional £2.7 billion in revenue. Following an independent review, they were granted an extra £463 million.
This adjustment is expected to lead to an average bill increase of 2.2% for customers, in addition to the previously allowed 24% rise. The specific increases vary among suppliers, with South East Water authorized to raise bills by an extra 4% to £284 annually. Meanwhile, Southern Water and Wessex Water will see a 3% increase to £641 and £614 per year, respectively. Anglian Water will be able to add 2% to customers’ bills, raising them to £602 annually.
In contrast, Northumbrian Water will not be permitted to further increase bills. Combined, these companies cater to around 14 million individuals. The CMA emphasized the importance of balancing the impact on households with the suppliers’ financial needs.
Despite the adjustments, a public body advocating for water consumers expressed concerns that the additional bill hikes may still be unaffordable for many customers. Water companies have faced criticism for escalating bills while grappling with issues like leakages and discharging untreated sewage into water bodies.
Mike Keil, the chief executive of the Consumer Council for Water, highlighted that the approved increases, though less than what the companies sought, might burden struggling households. He called for reforms to empower customers to challenge price hikes effectively and address the existing power imbalance between water companies and consumers.
Chair of the independent group, Kirstin Baker, clarified that while most of the requested bill increases were denied, some extra funding was permitted where necessary to ensure water supply security and pollution reduction. Market dynamics since Ofwat’s decision contributed significantly to the additional funding.
The revised average yearly bills for customers reflect the approved adjustments. Although customers cannot switch water companies, there are ways to save money, such as reducing water usage and exploring free water-saving devices. Installing a water meter, as suggested by Martin Lewis, could also lead to cost savings based on household size.