The watchdog allowed bills to rise sharply from 2025-30, but not by as much as suppliers had wanted, to help fund badly needed infrastructure upgrades in key areas, such as storm overflows to prevent sewage spills. Water UK, which represents the water firms, said the average water and wastewater bill would go up from £480 to £603 during 2025/26 - an increase of about £10 a month. But the increases will be even harder to swallow for many.
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Southern Water customers will see the largest in percentage terms, a 47% increase, taking their average bill to £703. Bills for households covered by Hafren Dyfrdwy and South West Water will rise by 32%. Thames Water's 16 million customers face a 31% hike to £639 - a rise of £151 - at a time when the company is still scrambling to secure its financial future amid a massive debt pile that could yet tip it towards a special administration process.
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Water UK explained that the rises may be higher than customers were expecting as the annual totals now included inflation calculations.
The body also said that the increases across households would also vary, depending on circumstances such as water use and whether a water meter was installed.
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They will come into force at a time when consumers are facing a surge in other costs. Industry estimates suggest another hefty increase in energy bills will be seen from April, when the energy price cap is adjusted to reflect higher wholesale prices. Council tax is also among the bills set for above-inflation rises.
Poorer households get support Water UK said that it recognised the impact that rising water bills would have on poorer households, pledging that more than three million would receive support worth £4.1bn over the five-year pricing period. It urged those concerned about paying the increase to contact their supplier. Water UK also sought to reassure customers that they would see a return, following widespread anger over historic dividends for shareholders. Water UK said firms would invest around £20bn each year to 2030.
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Read more from Sky News: Chancellor announces backing for third Heathrow runway Love Island star freed on bail after being jailed for dog attack Upgrade works will include nine new reservoirs and increased capacity at 1,700 wastewater treatment works to reduce pollution and clear up rivers. Water UK admits rises 'will be difficult' Water UK chief executive David Henderson said: "We understand increasing bills is never welcome and, while we urgently need investment in our water and sewage infrastructure, we know that for many this increase will be difficult. "Water companies will invest a record £20bn in 2025-26 to support economic growth, build more homes, secure our water supplies and end sewage entering our rivers and seas."
The industry has argued that constraints on bills over 15 years, coupled with climate change and population growth, have been responsible for the growing pollution crisis. Regulator says bill rises are 'challenge' Ofwat has denied this, saying companies must take responsibility. Its chief executive David Black said of the bill rises ahead: "We recognise the challenge that some customers are facing with increasing financial pressures and understand that the water sector is not the only area where customers are faced with rising costs. "While water bills will vary depending on the circumstances of each household, the average increase forecasted for 2025/26 will be 26% or £123.
"We have pushed companies to double the amount of support over the next five-year period and strongly encourage customers who are struggling to pay their water bills to contact their water company to access this."
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