The Lead Untangles: Rising water bills
As complaints to the Consumer Council for Water rocket over lack of affordability, why is the price we pay for our water increasing so rapidly?
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At a glance facts
Water bills rose in April by an average of £33, or 5.4 per cent. This brings a typical annual bill to between £606 to £639, according to industry body Water UK. What you actually pay will vary depending on where you live, whether you are eligible for a reduced tariff and how much water you use.
Last year, Thames Water – Britain’s biggest provider, serving 16 million customers – increased bills by 35 per cent – well above the industry average. According to analysis from Martin Lewis, this year they implemented a further 3.4 per cent, which amounts to an average increase of £3.
The biggest increase this year is from Severn Trent Water at £52 or 10 per cent. United Utilities, which serves the North West, has increased bills by £57 (9 per cent) and Southern Water has increased them by £55 (8 per cent).
These are smaller increases than the average 26 per cent that were implemented in 2025-26.
Complaints to the Consumer Council for Water increased by 50 per cent in 2025 with the lack of affordability of bills the biggest issue by some distance.
All of this is set against a backdrop of a winter of discontent for water users (read: everyone) in which thousands were left without water, and the ongoing scandal of Britain’s waterways being polluted on a daily basis due to creaking infrastructure that needed investment long ago.
Context
Ofwat, which will be abolished and replaced under government plans announced in 2025 after an independent review found that the current regulatory system was failing, said that the bills are supporting long-term improvements in the water sector by 2030.
These improvements will, in theory, tackle issues like the water supply failures seen across parts of Kent and Sussex in January, which South East Water attributed to Storm Goretti.
That’s a high profile issue – 30,000 were left without water and it’s close to London – but reporting by The Lancashire Lead highlighted thousands were faced with the same issues to start 2026. These are not isolated incidents.
Water companies say that the increase in bills will pay for investment that will prevent issues like this from being so common.
But River Action, which campaigns for cleaner waterways, says households are paying twice for investment that should have been funded from previous bills.
The investment is not just to pay for water that comes from our taps, but also to prevent sewage overflows of the like which mean that Windermere is literally full of faeces. Only 14 per cent of England’s rivers and lakes meet good ecological standards. The Blackpool Lead recently reported that raw sewage is routinely pumped into the sea despite continued public outrage.
And while investment is welcome, the total amount water companies have paid out to shareholders in dividends since privatisation over 30 years ago grew to £72.8bn by 2024.
Those same companies have accumulated over £60bn in debt over the same period, with Thames Water holding the largest share.
According to YouGov polling in 2024, 82 per cent of the public want to see water companies brought into the public sector. Throw in consecutive bill increases and it doesn’t take much imagination to see that number increasing.
About those bonuses
While investment needs were clearly not being met over the last decade, water companies paid over £112m in bonuses and incentives.
The government attempted to ban those bonuses being paid to chief executives and chief financial officers with legislation passed in the Water (Special Measures) Act in 2025.
But this only referred to ‘performance-related’ bonuses, and loopholes have been exploited by water companies by labelling payments differently or paying through linked companies. The Guardian reports that Thames Water, for example, is banned from paying bonuses and instead plans to pay staff millions in ‘retention payments’.
Elsewhere, Yorkshire Water chief executive Nicola Shaw received £1.3m in undisclosed pay via Yorkshire Water’s Jersey-registered parent company, Kelda Holdings. South East Water boss David Hinton is set for £400,000 in bonus pay despite tens of thousands being without water for weeks. Wessex Water’s former boss Colin Skellett received a £170,000 bonus in the same year as the bonus ban came in – it was allowed because it was made by a parent company.
Tougher measures are expected in May.
What people are saying
“As people continue to face a cost-of-living crisis, it’s important that the water industry demonstrates value for money at the same time as investing in the infrastructure needed to meet the demands of the growing population and climate change.” – Maya Ellis, Labour MP for Ribble Valley to The Lancashire Lead
“We will continue to monitor performance and hold companies to account as they progress on this journey. Money received by companies from customers is ringfenced for improvements, so if they do not deliver on their commitments, they will be made to return money to customers in their future bills.
“However, we also recognise that these bill increases may be difficult for some people. That is why we approved a doubling of company support available for customers who are struggling to pay and now, more than 2 million households are accessing this help.” – Chris Walters, Ofwat’s interim chief executive
“It is fundamental that the public should not be made to pay twice for water companies’ past failures to invest in improvements to stop sewage pollution.
“Meanwhile, degraded infrastructure keeps spewing pollution into rivers and lakes across the country that should have been clean decades ago.” – Emma Dearnley, head of legal, River Action
“The water companies were never going to operate within the spirit of the law. They have always tested the limits of the law. They have misled governments and polluted the environment, so they were never going to do the right thing. I was not surprised at all. They were warned before the Water (Special Measures) Act became law that this would happen.” – Fergal Sharkey, water campaigner and former Undertones frontman
What happens next
Water bills are set to rise by roughly 30-36 per cent between 2025-30, which means most bills will be over £700 in real terms.
A new regulator is to be established to replace Ofwat, the Drinking Water Inspectorate and other functions from the Environment Agency and Natural England.
The goal is to shift from solving issues as they happen to ‘prevention-first’ – which you would hope that the planned investment funded by increased bills would already achieve.■
About the author: Luke Beardsworth is Senior Editor of our Lead Local network and writes the award-winning editions of The Blackpool Lead and The Lancashire Lead.
About The Lead Untangles: In an era where misinformation is actively and deliberately used by elected politicians and where advocates and opposers of beliefs state their point of view as fact, sometimes the most useful tool reporters have is to help readers make sense of the world. If there is something you would like us to untangle, email ella@thelead.uk.
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