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Water companies in England and Wales may be allowed to raise bills by more than previously anticipated over the next five years, according to reports. Regulator Ofwat had originally suggested a 21% increase in water bills through to 2030 but is now reportedly considering allowing higher hikes to reflect rising financing costs and the need for significant investment in infrastructure upgrades.
In July, Ofwat had signaled the possibility of a £19 average annual increase per household during its regulatory period. However, recent reports from the BBC suggest that the regulator may permit larger bill increases as water firms face the pressure of financing improvements to their aging networks.
This comes as almost all water companies in England and Wales have requested higher bill increases, according to Ofwat. Southern Water has proposed a 44% increase between 2025 and 2028, while Thames Water, which is facing significant financial challenges and potential renationalisation, has requested a 23% rise in customer bills.
Ofwat has emphasized that no final decision has been made regarding the bill hikes, with the regulator expected to release detailed plans for the upcoming regulatory period later this year. The regulator has also stressed that water companies will need to provide stronger justification for any significant bill increases.
In addition to the potential bill hikes, the government is expected to unveil an independent advisory commission to oversee a “proper reset” of the water industry. This move comes ahead of the largest sector overhaul since the privatisation of water companies in the 1980s, signaling a renewed focus on improving water infrastructure and management.
