Consumer groups are calling for water companies in England and Wales to increase their support for vulnerable households as steep water bill hikes are set to be announced. The water regulator, Ofwat, is expected to reveal on Thursday how much bills will rise over the next five years, starting from April 2025.
The anticipated price increases aim to fund significant infrastructure upgrades and provide returns to investors. However, the Consumer Council for Water (CCW) has expressed concern that the rising costs will make water bills unaffordable for many households, urging Ofwat to push companies to expand their financial support programs.
Mike Keil, Chief Executive of the CCW, stated: “There needs to be far greater ambition from some water companies in providing support to households who are not going to be able to afford these large bill rises. Companies’ existing plans fall short of meeting the commitment they previously made to end water poverty in England by 2030, and Ofwat should push them harder to deliver on this.”
Calls for a Unified Social Tariff System
Campaigners are advocating for a single, nationwide social tariff system funded collectively by all water suppliers. Currently, each water company offers its own social tariffs, which provide discounted rates for low-income households. However, discrepancies between regions create a “postcode lottery,” with some areas receiving more generous support than others.
Tom MacInnes, Director of Policy at Citizens Advice, emphasized the need for better collaboration between water companies and the government to ensure that vulnerable households receive adequate assistance.
“We know water firms need to fund investment, but many households will struggle to shoulder these price rises. Social tariffs should be the safety net, but people often don’t know about the schemes or face hurdles when applying for them,” he said.
Rising Bills and Public Outrage Over Sewage Pollution
The proposed bill hikes come amid growing public anger over sewage being discharged into rivers and seas. Ofwat’s draft plan in July proposed increasing average annual water bills by £94, reaching £535 per household between 2025 and 2030. This would fund £88 billion in infrastructure investment, although the water industry had pushed for £105 billion.
The final determination from Ofwat is expected to approve higher investment levels, with Thames Water particularly reliant on increased funding. Facing £19 billion in debt, Thames Water serves 16 million customers across London and the Thames Valley. The company recently warned it would run out of cash by March 2025 without securing £3 billion in financial aid and raising a further £3 billion in equity investment.
Increasing Water Debt and Struggling Households
Even before the upcoming price hikes, many households have been struggling with water bills. Earlier this year, bills rose by 6% on average. Citizens Advice reported helping 33,500 people with water debt in the first nine months of 2024—a 15% increase compared to the same period in 2023. The average water debt rose by 8% to £783 during the same timeframe.
Water Companies Respond
Water UK, the industry’s trade body, defended the need for increased investment while acknowledging the impact of rising bills. A spokesperson for Water UK pointed to polling by the CCW, which found 75% support for investment to “support economic growth, build more homes, secure our water supplies, and end sewage entering our rivers and seas.”
“We urgently need investment in our water and sewage infrastructure,” the spokesperson said. “However, we understand bill rises are never welcome, and water companies are massively increasing the level of financial support they offer to customers. Currently, more than two million households benefit from support measures such as payment breaks, reduced tariffs, and debt relief. This number is expected to rise to over three million in the next five years.”
