Millions of households are set to experience a higher increase in their water bills than initially agreed upon, following complaints from five companies to the competition watchdog. The regulator, Ofwat, had permitted 16 water companies to raise bills by an average of £157 over a five-year period from 2025 to 2030. However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water argued that this allowance would not align with regulatory obligations.
These companies approached the Competitions and Markets Authority (CMA) seeking approval to generate an additional £2.7 billion in revenue. After an independent review, the companies have been granted an extra £463 million. This adjustment is expected to lead to a 2.2% average increase in customers’ bills, supplementing the previously approved 24% hike, but falling short of the 3% rise provisionally granted in October.
The specific increments in customer bills vary among suppliers. South East Water will be permitted to raise bills by an extra 4% to reach £284 annually. Southern Water and Wessex Water will implement 3% increases, resulting in bills of £641 and £614 per year, respectively. Anglian Water will see a 2% rise to £602 annually. Northumbrian Water, on the other hand, will not be increasing bills further. Collectively, these companies serve around 14 million individuals.
The CMA emphasized the need to balance the impact on households with ensuring adequate funding for suppliers. However, a consumer advocacy group expressed concerns that the additional bill hikes may still be unaffordable for many customers. The ongoing issue of escalating bills amid concerns about water leakages and untreated sewage disposal remains a point of contention.
In response to these developments, Mike Keil, CEO of the Consumer Council for Water, highlighted the growing complaints about water bill affordability and called for reforms in the appeal process to empower 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 approved where essential to maintain water supplies and address pollution concerns.
The adjusted average yearly bills for customers have been outlined, reflecting the revised pricing structure. While switching water companies is not an option, there are ways to save money, such as conserving water usage through simple practices like shorter showers and turning off taps when not in use. Additionally, exploring free water-saving devices and considering a water meter installation could lead to cost savings, as suggested by financial expert Martin Lewis. Subscribe to the Mirror Money newsletter for more money-saving tips and exclusive offers.