Water bills set to rise by 5.7%
Average water and sewerage bills in England and Wales will rise by 5.7% from April, taking the average bill to £376 per household.
The price rises are part of industry regulator Ofwat's five-year plan to help fund £22 billion of investments through annual rises, which started in 2010.
Prices are meant to rise by inflation plus 0.5%, but in reality they vary across regions depending on the level of capital investment each water company is undertaking. For example, prices in the Southern Water region are set to rise by 8.2% as the company aims to cover the costs of a coastal protection programme.
"We will make sure customers get value for money. Companies are investing £22 billion by 2015 – more than £935 for every property in England and Wales. This will deliver benefits to us all – from continuing to improve reliability of supplies to cleaner rivers and beaches," says Regina Finn, Ofwat's chief executive officer.
The bill increases will come in from 1 April 2012.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).