Annual water bills are set to rise – here's how much more you could be paying

In a move that will affect millions of households across England and Wales, water bills are poised for a significant increase over the next five years.

Ofwat, the Water Services Regulation Authority, has unveiled a sweeping £88 billion investment plan that aims to modernise water infrastructure, improve environmental stewardship and enhance customer service.

This will mean that, on average, water bills will rise by £94 by 2030. Some households may subsequently be forced to seek help with their water bills. We reveal how much your water bills are set to rise by.

Water bills set to rise by £19 a year on average

Water bills in England and Wales are set to increase significantly over the next five years, according to Ofwat's latest proposals.

On average, household water bills are expected to rise by £19 per year over the next five years, totalling £94 by 2030 (excluding inflation). This increase is substantially lower than what water companies initially proposed, which averaged £144 over five years.

That said, some water companies will making significantly higher increases. South Water, for instance, will be hiking up customer bills by £183 in this period.

The rise in bills varies between water companies:

• Thames Water customers could see an increase of £99 by 2030 (down from the company's proposed £191)
• Severn Trent customers may face a £93 increase (reduced from the initial £144 proposal)

The £35 billion allocated for these improvements represents more than triple the investment level of the 2020-2025 period.

It's worth noting that Ofwat has trimmed £16 billion from the water companies' original spending plans, aiming to prevent customers from paying for unnecessary or inefficient expenditures.

Why are water bills rising?

David Black, Chief Executive of Ofwat, explained the rationale behind the rise in water bills claiming the aim is "to make sustained improvement to customer service and the environment".

A significant portion of the investment – £35 billion – is earmarked for environmental improvements and infrastructure upgrades. This represents more than triple the investment level in the 2020-2025 period.

"Customers want to see radical change in the way water companies care for the environment," Black stated, highlighting the public demand for action on environmental issues.

One of the key targets is a dramatic reduction in sewage spills from storm overflows. "These proposals aim to deliver a 44% reduction in spills from storm overflows compared to levels in 2021," Black said.

Ofwat has made it clear that water companies will be held accountable for delivering on these improvements. "We will be closely scrutinising the delivery of their plans and will hold them to account to deliver real improvements to the environment and for customers and on their investment programmes," Black asserted.

Water firms say price rises not enough

Water companies argue this increase is not enough to address issues like sewage leaks and prepare for future water shortages.

Water UK, representing the industry, claims this is "the biggest ever cut in investment" and will slow down environmental improvements. They have warned that the UK may fail to meet its target of building 1.5 million homes over the next five years unless they are allowed to increase customer bills.

The water industry is asking for a £26 yearly rise in bills, higher than the £19 proposed by regulator Ofwat. Thames Water were accused of "blackmailing" their customers after announcing plans to raise water bills by 40%.

However, Water UK’s chief executive, David Henderson, argued that infrastructure improvements necessary for housebuilding and addressing sewage issues will not be possible without this increase.

Henderson said: “We are not going to be able to build the £1.5 million homes we desperately need.”

Critics have also noted that water companies have paid out £2.5 billion in dividends despite performance issues but Henderson dismissed this calling the amount "a drop in the ocean".