Ofwat Provisionally Approves £3.4bn Water Bill Rises Across England and Wales

Ofwat water bill rises affecting millions of households moved a step closer this week, as the regulator provisionally approved £3.39 billion in mid-cycle funding for 13 water companies in England and Wales, with customers of five suppliers set to see annual bills climb by up to £43 between 2027 and 2030.

The funding sits outside the main five-yearly Price Review process. Smart Water Magazine reports that Ofwat created a Cost Change Process specifically for areas where costs were uncertain when it set its PR24 final determinations in December 2024, giving companies a mechanism to bring forward investment without waiting until the next full review in 2029.

The approval is provisional. A consultation is under way, and final sign-off is expected in December.

Which customers face Ofwat water bill rises and by how much

Southern Water customers face the steepest increases under the new process. According to Ofwat, the figures below show the effect of the decision on bills next year and in 2029/30, the final year of the current Price Review period. They are not individual increases for each of those years and should not be added together. Southern Water customers will see bills £43 higher next year and £37 higher in 2029/30, so a £100 annual bill this year would be £143 next year and £137 in 2029/30, not £180. Severn Trent’s increase will be £3 next year, rising to £5 in 2029/30, not £8 higher by 2030, and the same applies to Thames Water. Wessex Water customers face £4 next year and £7 in 2029/30, and South East Water customers £0 and £1.

Source: Ofwat

These increases arrive on top of rises already agreed through the 2024 Price Review. Under that separate settlement, Southern Water customers were approved the largest increase of any supplier, with bills set to rise 53% by 2030 to £642. Severn Trent customers face a 47% rise under PR24; Thames Water customers face a 35% rise.

The eight companies not permitted to recover additional costs between 2027 and 2030 — including Anglian Water, Northumbrian Water, United Utilities and South West Water — will instead add the Cost Change Process amounts to bills in the 2030s.

What the money is for, and how much each company requested

Nearly a third of the provisionally approved funding is earmarked for maintaining existing water services. The remainder covers rising demand from housebuilding and data centres, and the cost of addressing PFAS pollutants, sometimes called forever chemicals. Specific projects include new data centre capacity in Manchester, additional wastewater infrastructure in Newquay, and accelerated work by Wessex Water on PFAS contamination that was originally scheduled for the 2030–35 period.

The gap between what companies requested and what Ofwat approved varies considerably. Ofwat’s own published figures show Southern Water requested £1,025 million and was allowed £749 million; United Utilities requested £1,113 million and was allowed £995 million. Severn Trent requested £481 million and received approval for £329 million, roughly 68% of its application.

Helen Campbell, executive director for delivery at Ofwat, said: ‘We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.’

That clawback provision has done little to quiet the political response. The BBC reports that Greater Manchester Mayor Andy Burnham described the decision as ‘an insult’, calling the increases ‘real money out of family budgets at a time when they are struggling with the cost of living’. Environment Secretary Angela Eagle said: ‘I know that households across the country are watching every pound and I share their frustration that years of underinvestment and toothless regulation has led to this.’

Campaigners are equally unimpressed. Kierra Box, water campaigner at Friends of the Earth, said: ‘Our rivers and seas are chock full of filthy sewage and chemicals, which have seen next to no improvement despite recent bill hikes. Now ordinary people are being asked to foot the bill once again to pay for decades of water company inaction on upgrading our crumbling water infrastructure.’

What households can do to limit the impact

Switching to a water meter is the most direct lever available to many customers. Meters charge based on actual consumption rather than the rateable value of the property, and most households can have one installed for free. The Consumer Council for Water offers a calculator to help customers assess whether a meter is likely to reduce their bill. Single-person households and homes with a high rateable value typically benefit most, though a meter can push bills higher as well as lower.

Customers with a water meter, who are on qualifying benefits such as Universal Credit or Pension Credit, and who either have a medical condition requiring high water use or a large household, may be eligible for the WaterSure scheme, which caps bills regardless of consumption.

Free water-saving devices — leak-detecting strips, water-efficient shower heads — are available from several suppliers. The Save Water Save Money website lets customers enter their postcode to see what they qualify for.

The next material date is December, when Ofwat is expected to issue its final determination on the Cost Change Process. For Southern Water customers in particular, that ruling will settle how much of their already substantial PR24 uplift is compounded further.