Two in five households will struggle with water bill increases, report warns

Two in five households across England and Wales say they will find it difficult to afford the increases to water bills being proposed by the regulator Ofwat, according to a report.

Overall, 40% of water customers said they would find proposed changes to their bill difficult to afford – more than double the 18% who say they have difficulty paying their current bill, a survey of 9,500 households in August and September for the Consumer Council for Water (CCW) found.

In Wales, concerns were even more acute with nearly half of customers (48%) saying they would find the planned rises difficult to afford.

Customers were broadly supportive of the way their money would be spent to tackle issues like leakage and reducing pollution into rivers, lakes and seas, with 75% of those polled finding the overall investment package for their company acceptable.

However, overall acceptance of the investment plans shrank to 58% when customers were reminded of the proposed bill rises later in the survey.

There was also considerable variation on acceptance across water companies, with 81% of Severn Trent Water bill-payers endorsing its draft determination compared with 65% of Southern Water households.

CCW said the findings showed that while the majority of people backed the need for investment in water and sewerage services, the price tag would be too much to bear for millions of households.

The watchdog has already voiced concerns that some water companies’ proposals to expand financial support for struggling customers do not go far enough, arguing there remained an “urgent” need for a single social tariff for England and Wales to end the current postcode lottery of assistance.

Ofwat’s draft decisions allow water companies to increase bills by an average of 21%, before inflation is added, over the next five years to help fund £88 billion of investment in improving services and the environment.

The proposed bill rises would begin to take effect from April 2025.

CCW said it carried out the survey in collaboration with Ofwat to help ensure households were presented with a clear and understandable picture of the proposed changes to their water bill – including the impact of forecast inflation – and how their company would be expected to invest in services.

Among those who said they would find the proposed water bills for 2025-30 difficult to afford, 54% said they would cut back on non-essentials to pay for it, while 43% said they would use less water and 38% would reduce spending on food shopping and other essentials.

CCW chief executive Mike Keil said: “These bill increases would put an intolerable strain on the finances of millions of households and only a single social tariff can provide the safety net that is needed to ensure water is affordable for everyone.

“People support the need for investment but there is a strong undercurrent of mistrust over whether water companies can deliver on their commitments. Customers need to see evidence their money is being well spent, otherwise fractured trust in the water sector will never be repaired.”

A Water UK spokesman said: “We urgently need investment in our water and sewage infrastructure. As this research shows, there is widespread public support for that investment with 75% backing water companies’ record-breaking proposals to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers and seas.

“However, we understand increasing bills is never welcome. To protect vulnerable customers, companies have proposed increasing the number of households receiving support with their bills to three million over the next five years”.

Last month, figures released by Ofwat revealed water companies have asked to increase consumer bills by even more than they originally requested.

The latest requests by water firms would see the average consumer bill in England and Wales rise by 40% between now and 2030, costing £615 per year.

Earlier this year, companies asked Ofwat for bills averaging £585 by 2030, an increase of about one-third from the current average of £439.

This summer, the regulator pared back those requests to an average of £535, in its draft price review in July.

But now, after a consultation period, 10 of the 11 water companies have hit back with even higher requests than before.

Ofwat is due to make a final decision on bill increases on December 19, with companies going to the negotiating table with regulators before then.

A Defra spokeswoman said: “We’ve inherited a water system with crumbling infrastructure, bursting pipes and record levels of sewage pollution.

“Delays over the last decade to upgrade our infrastructure have left customers paying more. That is why we have taken urgent steps to ensure this never happens again.

“Funding for vital infrastructure investment will now be ringfenced so that money can only be spent on upgrades – not diverted for bonuses or shareholder payouts.

“However, we must go further. We have announced an Independent Water Commission which will report back next year with recommendations to protect customers.”