In April, UK households will face a 6% increase in their average water bills, pushing the annual cost to approximately £473 for combined water and sewerage services. While this rise, as reported by Water UK, remains below inflation and marks a real-term reduction since 2019, it comes with concerns over its impact on consumers. This article delves into the implications of the impending water bill hike and the actions needed to support households facing financial challenges.
The Current Situation
Water UK, the trade body representing water suppliers, has confirmed the forthcoming increase in water bills. The average household in England and Wales can expect to see their annual bill rise by around £27 from 1 April, a 6% average increment. However, it’s important to note that regional variations and individual factors, such as metered usage, will result in varying bill amounts for different households.
Currently, more than 2 million customers receive some form of assistance from water companies in paying their bills. This includes over 1.3 million low-income households benefiting from reduced bills through social tariff schemes. These schemes, which rely heavily on cross-subsidies from customers, saved eligible households an average of £151 last year. However, many more customers in need of support are not benefiting due to low awareness and variations in eligibility criteria.
The Call for Industry Support
Consumer watchdog CCW (Consumer Council for Water) has urged water companies to do more to aid households struggling with rising bills. CCW emphasizes the importance of companies contributing from their profits to fund social tariffs, aligning with the industry’s commitment to ending water poverty.
Currently, only five water companies—Welsh Water, Severn Trent, Yorkshire Water, SES Water, and United Utilities—are using their profits to support social tariffs. The remaining companies are called upon to follow suit, ensuring that no vulnerable customers are left behind.
Mike Keil, Chief Executive of CCW, highlights the significance of addressing the financial pressure faced by low-income customers, stating, “If water companies are serious about rebuilding trust in the sector, they should use some of their profits to help people who cannot afford another bill rise.”
Ofwat’s Perspective
David Black, CEO of Ofwat (the water regulator for England and Wales), acknowledges the financial challenges faced by households due to the COVID-19 pandemic and the cost of living crisis. He encourages water companies to take proactive measures to support customers in need.
Ofwat’s research reveals that awareness of available support, such as social tariffs or switching to water meters, remains low among consumers. Black emphasizes the importance of customers contacting their water companies to explore available schemes that can help reduce bills, facilitate payment arrangements, or address debt.
Furthermore, Black explains that some water companies have deliberately kept average bills lower in previous years, easing the financial burden on customers while investing in infrastructure. The 6% increase in bills for the upcoming year is partly attributed to the incorporation of previously withheld revenue, but even with this adjustment, bills will remain lower in real terms than they were in 2019/20.
Conclusion
The impending 6% rise in water bills in the UK underscores the delicate balance between ensuring the financial sustainability of the water industry and protecting vulnerable households from undue financial strain. While water companies have taken steps to provide support, there is a growing consensus that more can be done.
Consumer advocates, regulatory bodies like Ofwat, and industry leaders need to collaborate to enhance awareness of available support and encourage companies to contribute from their profits to fund social tariffs. By prioritizing the well-being of customers, the water sector can demonstrate its commitment to responsible and equitable service provision while addressing the evolving challenges of the cost of living.
