Water Bills to Rise 36% Before Inflation, Adding £31 Annually, Says Ofwat

Dec 19, 2024, 07:25 AM

Water bills in England and Wales are set to increase by an average of 36% over the next five years, according to water regulator Ofwat. The increase, which is before inflation, equates to an average extra £31 per year for households, to fund a £96 billion investment plan aimed at improving services, preventing pollution, and addressing the sewage crisis. Some regional suppliers will see even higher increases, with Southern Water customers facing a 53% rise, taking average bills to £642 by 2030, and Thames Water bills rising by 35% to an average of £588 by 2030. Thames Water had sought a larger increase but was capped by Ofwat and has been fined £18.2 million for paying "unjustified" dividends, and required to repay £131 million of the money paid out. The regulator has increased the allowed return to investors to 4.03%, acknowledging higher borrowing costs. Environment Secretary Steve Reed stated that "the public are right to be angry" about the state of the water industry, promising that the Labour government would "ringfence money earmarked for investment." Consumer groups warn that the hikes will be unaffordable for nearly 10 million UK households. The decision aims to fund record levels of investment required to safeguard the health of rivers, seas, and waterways.