The number of householders in England and Wales who are struggling to pay their water bill has jumped by a third, Ofwat said.
The regulator recorded a 33% rise in the number of customers currently struggling to pay since May, up from 15% to 20%.
Three quarters (75%) of younger people aged 18 to 34 had reported struggling to pay household bills sometimes or more often.
Although the proportion of respondents receiving financial help from water companies had increased from 6% to 9%, there had also been a drop from 31% to 28% in the proportion of those aware that such support was available.
The report suggests that the number of customers who have struggled to pay their household bills has more than doubled from 12% to 25% in a year.
Some 49% of respondents to Ofwat’s latest survey said they would be “concerned” if there was a £25 increase in household costs.
Ofwat called on water companies to do everything they can to help customers struggling to pay their water bill.
Ofwat spokeswoman Claire Forbes said: “We know from previous research that many customers are struggling with utility bills. As today’s report underlines, this financial strain is persisting and, for many, worsening.
“As winter approaches, water companies must ensure they are supporting their customers and informing them of the help available. We will continue to listen to customers’ concerns, monitor how well water companies are responding and take further action where necessary.”
Emma Clancy, chief executive of the Consumer Council for Water (CCW), said: “This winter will be unbearable for many households, which is why we’ve joined Ofwat in calling on water companies to go the extra mile to help their customers, as well as ensuring much more of the existing support reaches those that need it most.
“The case for a new water affordability scheme to replace the current postcode lottery of financial support has never been more compelling.
“Without fair and consistent support across England and Wales, the next generation of customers could face the double whammy of unaffordable bills and an environment starved of vital investment.”