Water bills could go up by an average of 40 per cent – almost double what was previously expected – over the next five years as the industry faces what could be its biggest overhaul in decades.
An average bill increase of 21 per cent above inflation over five-year period up until 2030 – amounting to an £19 extra per year – was provisionally approved by regulator Ofwat in July, to fund an £88bn upgrade to England and Wales’ sewage infrastructure.
However, those proposed increases were a third less than water companies had asked for, with firms proposing rises of up to 73 per cent between 2025 and 2030.
In revised figures published by the watchdog on Tuesday, Ofwat is now considering allowing further increases to fund higher costs and more investment to address the sector’s sewage spills and ageing infrastructure.
With the regulator due to make its final decision at the end of the year, it remains unclear exactly how much more bills will now rise by.
But Ofwat said in an update that recent expenditure requests from the various water and wastewater companies in England and Wales, if approved, could increase the average water bill for customers by 40 per cent, or £35 each year up until 2030.
How much your water bill could increase by
After Ofwat provisionally approved an average bill increase of 21 per cent by 2029-30, water companies have put together revised figures asking for an average increase of 40 per cent over the same five-year period.
The amount varies by company, with Ofwat saying it “will consider this additional expenditure request as part of our final determinations.”
If Ofwat agrees to the requests, here is what you could be paying by 2030 compared to the current average bill per company:
Anglian Water: 25 per cent increase, from £491 to £614 Dŵr Cymru: 38 per cent increase, from £455 to £626 Hafren Dyfrdwy: 45 per cent increase, from £392 to £568 Northumbrian Water: 21 per cent increase, from £415 to £501 Severn Trent Water: 46 per cent increase, £398 to £580 Southern Water: 84 per cent increase, from £420 to £772 South West Water: 23 per cent increase, from £497 to £613 Thames Water: 53 per cent increase, from £436 to £667 United Utilities: 32 per cent increase, from £442 to £584 Wessex Water: 29 per cent increase, from £508 to £658 Yorkshire Water: 35 per cent increase, from £430 to £583 Weighted average water bill: 40 per cent increase, from £439 to £615 For a similar table based on the increases set out in Ofwat’s draft decision in July, click here.
This could also vary significantly by region, with the likes of Southern Water having requested an 84 per cent increase – from an average of £420 in 2024-25 to £772 in 2029-30 – and Thames Water proposing a 53 per cent hike in bills for their customers.
The latter, the UK’s largest water company, was told in July it would be able to raise its bills by 23 per cent, but has since said it will not survive if it cannot increase bills by 59 per cent.
The revised requests would represent an average increase that is both nearly double what was provisionally approved by Ofwat in July, and also greater than the £29 annual rises (equivalent to 33 per cent) proposed in companies’ initial business plans put forward in March.
Ofwat said that in August, following the release of its draft decision, water companies had together increased their expenditure request by more than £7bn compared to initial figures, resulting in a combined £19bn more than its draft determination allowances.
The regulator added that companies had requested almost half of the additional expenditure due to new regulations from the Environment Agency over leaks and sewage spills.
The remainder, according to water companies, is due to net cost increases compared to original business plans – such as existing schemes becoming more expensive or companies asking for more to deliver schemes already in their business plan.
It comes as the Government prepares to announce plans later this week that are expected to spark the most significant reform of the water industry since its privatisation in the late 80s, aimed both at protecting customers from the impact of bill increases and finding funding to modernise the UK’s ageing water infrastructure.
Customers have been left enraged as bill are raised against a backdrop of record levels of sewage spills, while water companies claim bills are still proving insufficient to fix problems they are being fined for.
There has also been condemnation of the rising pay-outs received by water bosses, despite the rises in discharges and pollution of Britain’s waterways.
Paul de Zylva, senior sustainability analyst at Friends of the Earth, said: “Given the past failures of water companies to invest enough to fix pipes and upgrade creaky infrastructure, how much they themselves should pay, is a key question.
“The stand-off between Ofwat and the water firms is unhelpful. Water bill payers, river and environment groups are left on the sidelines but will be left on the hook for prices that are either high or very high.
“This all shows up both the failure of Ofwat to regulate properly in the past, including ensuring water firms invested what they were charging for, and how monopoly water companies have customers over a barrel.”
Mike Keil, chief executive of the Consumer Council for Water (CCW), added that the bill increases water companies are asking for from the regulator would place “an unbearable pressure on some of the most financially vulnerable customers” and called for firms to provide better support.
He said: “People want to see investment in improving services and the environment and understand bills will need to rise, but they also need reassurance that every pound is going to be well spent.
Water is a necessity, not a luxury, and it should be affordable for everyone. The financial support provided by water companies for struggling customers does not go far enough and there remains a pressing need to introduce fairer and more consistent support through a single social tariff.”