Millions of households are anticipated to experience larger increases in their water bills as five companies have been granted approval to raise prices beyond initially planned increments. The companies involved, including Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water, contested that the original price hikes set by water regulator Ofwat were insufficient.
In response to Ofwat’s announcement in December permitting water firms to raise bills by 36% over the next five years to fund upgrades and reduce sewage discharges, the aforementioned companies lodged an appeal in March. This appeal prompted an inquiry by the Competition and Markets Authority (CMA).
The CMA has now indicated that Anglian and Northumbrian Water can escalate their bills by an additional 1% from the initial proposal, while Southern Water can increase by 3%, South East Water by 4%, and Wessex Water by 5%.
Collectively serving seven million households in the UK, these companies had sought to boost revenue by £2.7 billion, but the CMA only sanctioned 21% of this request, translating to an extra £556 million in revenue.
Despite the approvals, consumer groups have cautioned that households already faced substantial bill hikes in April, with the average water bill surging by around £123 annually. Kirstin Baker, leading the independent group of experts appointed by the CMA to assess the price controls, emphasized that the requests for significant bill hikes from water companies were largely unwarranted.
Mike Keil, Chief Executive of the Consumer Council for Water (CCW), expressed concerns over additional bill increases following the recent surge, suggesting that there was potential to reduce financing costs for the companies, possibly leading to lower bills.
Water minister Emma Hardy acknowledged public discontent over bill rises and urged water companies to provide adequate support to those struggling to pay. Hardy also highlighted government initiatives to direct investment towards infrastructure upgrades and regulatory reforms to enhance transparency and trust in the water system.
While customers cannot switch water providers, there are still avenues to save money by conserving water through simple practices like reducing shower times and fixing leaky taps. Additionally, installing a water meter could offer potential savings, as recommended by financial expert Martin Lewis.
Households can further benefit from free water-saving devices available through Save Water Save Money, such as water-efficient shower heads, tap inserts, and cistern bags to minimize water consumption. To stay updated on money-saving tips and exclusive offers, subscribe to the Mirror Money newsletter.
