Millions of households are set to experience an increase in their water bills beyond what was initially agreed upon, following complaints from five companies to the competitions watchdog.
Previously, Ofwat had permitted 16 water companies to raise bills by an average of £157 over a five-year period spanning from 2025 to 2030. However, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water contested that this allowance would hinder their compliance with regulatory standards.
In response to their appeal, the Competitions and Markets Authority (CMA) conducted a review and granted the companies permission to generate an additional £463 million in revenue, a reduced amount from the requested £2.7 billion.
As a result, customers can expect an average bill increase of 2.2%, supplementing the previously approved 24% raise, but falling short of the initially proposed 3% hike granted in October.
The specific bill increases vary among suppliers. South East Water will be raising bills by an extra 4% to reach £284 annually. Meanwhile, Southern Water and Wessex Water will see bill increments of 3% to £641 and £614 respectively, with Anglian Water permitted a further 2% increase to £602 yearly.
Conversely, Northumbrian Water will maintain its current billing rates. These companies collectively serve around 14 million individuals.
The CMA emphasized the importance of balancing the impact on households with the necessity for adequate funding for the suppliers. Despite this, a consumer water body expressed concerns that the additional bill rises remain unaffordable for many customers.
In light of rising bills, coupled with ongoing issues of leakages and untreated sewage polluting water bodies, there is growing discontent among the public regarding water company practices.
It is suggested that reforms to the appeal process are needed to provide customers with equal opportunities to challenge price increases, addressing the existing power imbalance between water companies and consumers.
Chair of the independent review group, Kirstin Baker, noted the rejection of most of the requested bill increases while allowing limited additional funding where essential, taking into account concerns about affordability and the need to ensure water supply sustainability and pollution reduction.
The average yearly bills for customers following the increases have been outlined. While customers cannot switch water providers, there are strategies to save money, such as reducing water usage and exploring free water-saving devices.
Notable financial expert Martin Lewis recommends considering a water meter for potential savings, particularly if there are more bedrooms in a household than occupants.