Water bills set to fall

13 December 2017

Water bills in England and Wales could fall by £15 to £25 a year from 2020, according to the water regulator.

The potential household saving comes as a result of new price limits for 2020 to 2025, suggested by Ofwat.

Water companies will now have to submit their business plans to the regulator, taking on board its recommendations, with final plans determined by December 2019.

Ofwat has also challenged water companies to:

  • Go the extra mile in terms of the services they provide.
  • Devise and deliver plans to identify and help vulnerable customers.
  • Make long-term plans to address the pressures of a growing population and climate change – starting with addressing leakage.

Cathryn Ross, Ofwat chief executive, says: “Today, we unveil our blueprint for how we will push water companies to deliver more for customers through to 2025. The next decade will see profound changes in customers’ expectations and we are pushing the water sector to be at the very forefront of that.

“The methodology we’ve published today outlines how we will use our price review to get the very best for customers, through higher quality of service and support for those who need it most, all with scope for lower bills. We’ve said many times already that this will be a tough price review for companies. We will cut the financing costs they can recover from customers and, with this lower guaranteed return, they will need to more efficient and innovative than ever before. I’ve no doubt that the sector can step up and meet the challenges we’ve laid before them today.”

‘Ofwat has been overgenerous to water companies in the past’

On the price cap, Tony Smith, chief executive of the Consumer Council for Water – which represents water consumers - comments: “This is positive news for customers. Ofwat has been over-generous to water companies in the past at the expense of customers – a point we have repeated publicly many times and has been echoed by the National Audit Office and the Public Accounts Committee. This lower cost of financing is an important step in keeping future water bills as low as possible.

“However, we are concerned that the regulator has decided to remove the cap on the financial rewards companies can receive for meeting their performance targets. This could hand companies an opportunity to claw back some of the money they would be unable to get through lower financing costs and it could lead to bill increases, which many customers view as rewards for doing the day job.”

In Scotland, water bills are dependent on your council tax band, while households in Northern Ireland don’t pay for water bills as the cost is covered by the government.

See our Energy and water section for more of the latest news and advice. 


In reply to by anonymous_stub (not verified)

It's not clear if the £15 -£25 reduction relates purely to water companies' supply of water only or combined water supply and sewerage services. If the latter, I don't think I'll see a reduction close to the figures suggested. Having moved from a property with a rateable value in Band E, where the water company bill was approx £700, I'm now in a Band F property but with overall costs of only £250, due to inheriting a water meter, and a private shared sewage treatment plant. Costs are only for metered usage and servicing/maintaining the sewage plant.

In reply to by anonymous_stub (not verified)

Anglian Water withdrew SoLow option for low users who went onto a meter, we paid a bit more for each cu/mtr but only paid for water used, now they have reduced each cu/mtr by a tiny amount and introduced a hefty standing charge, it now costs me 3 to 4 times the amount each year. People with meters should not pay standing charges just the cost of the water used, this would mean the cu/mtr price going up to what it was, this way encourages people to reduce water waste.

In reply to by anonymous_stub (not verified)

Are we going to see our bills reduced? If so, I will call it a saving. Alternatively, should this article not be rephrased to state that future bill increases may be be lower than inflation, rather than bills actually falling? Otherwise we may be getting the same kind of double-speak as when the Chancellor of the Exchequer stands up to present his Budget and tells Parliament that taxpayers will 'save' so much when fuel taxes are not increased. It's not a saving - it's simply not an increase. I know that Severn Trent Water took ample advantage of the opportunity to pass on significant 'investment' costs in bills in recent years when the government allowed water companies to do so. I wonder if those extra costs will have fed right through by now and whether or not billpayers may see a reduction due to that?

In reply to by anonymous_stub (not verified)

From my recent experience I would hope that some of the money goes into organisation of customer care. Currently I have three different cases open which are not co-ordinated. In three solid months it is still as far from resolution as when we started!

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