Water bills to hit more than £500

Published 24th Feb 2011

Water bills for more than 1 million households will climb to above £500 a year on average, it is expected to be announced later this week.


Price rises for all of the water companies in England and Wales, the only utility firms that operate still as monopolies, will be revealed by Ofwat, the industry regulator.

Bills for many will rise modestly. However, because of the high level of inflation some will be hit by annual increases of up to £40.

Those customers of South West Water, totalling 1.3 million households, will pay on average more than £500 for the first time, with new prices taking effect from April.

The average annual charge across the 10 major companies are expected to jump by about £20 from £364 to about £384.

Ofwat refused to comment on speculation about bill increases, saying consumers would have to wait until the end of the week for full details. However, it published details last year about price limits for all companies until 2015. Its formula is based on inflation, as measured by the Retail Prices Index, in the previous November. RPI in November 2010 was 4.7 per cent. Companies are then allowed to increase bills by a bit more or a bit less than inflation.

The increases come on top of recent surges in gas and electricity bills as well as the cost of food and drink, and at a time when many household incomes are stagnating as a result of wage freezes.

South West Water bills – already the highest – are likely to see the biggest increase, from an average of £487 to about £527, with maximum increases expected to be inflation plus a further 3.4 per cent. Northumbrian Water bills are expected to rise by 8.5 per cent, adding an £27 to the average bill of £311.

Martin Rogers, from Age UK in Exeter, said that although South West Water had made improvements in its business and services, many customers would struggle to pay their bills.

He said: "This kind of rise is going to be another nail in the coffin. It's going to be really difficult.

"It's about people looking at their finances and wondering if they can maximise them, or is it worth having a benefits check; is it worth having a water meter?"

Ann Robinson, from price comparison website uSwitch, said: "This will be a bitter pill for consumers to swallow. With the added blow of increased inflation, households are facing an extra threat."

Uswitch urged customers to consider installing a water meter. On average, those on a meter pay £56 a year less and meters are most likely to save money in households with more bedrooms than occupants.

South West Water said its bills were highest because it served only three per cent of the households in England and Wales, but had to clean up 30 per cent of the coastline.

It claimed bills might not reach the projected £527 because of a recent high number of households switching to water meters, but would not reveal its own estimates.

In October, Ofwat said one quarter of water companies are missing their targets on stopping leaks after two cold winters led to more cracked pipes.

Rob Wesley, policy adviser with industry group Water UK, said rises would be used to pay for investment in infrastructure such as fixing leaks.

He added that the consequences of lack of investment were demonstrated in Northern Ireland over Christmas, when thousands of residents had to use bottled water when freezing temperatures caused broken pipes.

Source: ' Telegraph '

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