Households in England and Wales are facing the biggest increase to water bills in almost two decades from April, putting further pressure on budgets already weathering the cost of living crisis.
The industry body Water UK said the typical water bill will increase to an average of £448 a year from April, a hike of 7.5%.
Consumer groups said the increase of 8p a day, or £31 a year, could be a “tipping point” for the one in five customers who were already struggling to pay.
They also warned that some consumers could pay significantly more than the average due to regional variations and individual factors, such as whether they have a meter and how much water they use.
However, Water UK said the increase was less than inflation. The regulator uses November’s CPIH figure, which was 9.3% last year, as a benchmark when setting prices.
It also argued that bills remained lower in real terms than they were a decade ago and that April’s increase reflects higher energy costs, saying water firms use approximately 2% of the nation’s electricity.
Stuart Colville, Water UK’s director of policy, said: “With an average increase of around 60p a week, most customers will again see a below-inflation increase in their water bill. However, we know that any increase is unwelcome, particularly at the moment.
“Anyone with worries should contact their water company or go to supportontap.org for advice, and it’s worth remembering that water companies will never cut anyone off, or make them use a prepayment meter.”
The organisation added that water firms are to invest a further £70bn to “eliminate harm” from storm overflows and increase water supplies by building new reservoirs and national water transfer schemes. It said companies had recently increased the level of support they offered to consumers by more than £200m.
However, consumer groups said help with bills was a “postcode lottery”, as each firm ran individual schemes.
Emma Clancy, the chief executive of the Consumer Council for Water, said: “Water is essential for all of us so no one should be worried about being able to afford their bill. These increases will bring more uncertainty to struggling households at a time when they can’t be certain they will get the help they need.
“Low-income households need immediate relief and the long-term security of knowing their water bill will be affordable. It’s not fair that struggling households face a postcode lottery when it comes to getting help with their bill – that’s why we urgently need a new water affordability scheme that provides consistent support based on people’s needs.”
Meanwhile, the energy price cap is expected to rise again in April, broadband and mobile customers are to see their bills increase by up to 14% and Kantar data showed food price inflation reached a record high of 16.7% last month.
The consumer group Which? released research on Thursday that showed 2.3m households defaulted on a bill payment in January, up from 1.9m in December.
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According to the Consumer Insight Tracker, approximately 16.5m households – or six in 10 – have made at least one financial adjustment, such as cutting back on essentials, selling items or dipping into savings, in the last month to cover essential spending.
Four in 10 households said they were making financial adjustments this time last year, but the number is lower than the peak of two-thirds recorded in September 2022.
The increase in the proportion making adjustments to cover essential spending last month was largely driven by more households cutting back on essentials, such as utility bills, housing costs, groceries, school supplies and medicines.
The number of households cutting back on essentials has increased by 11 percentage points from 27% in January 2022 to 38% this year, the research found.
Rocio Concha, Which? director of policy and advocacy, said: “With 2.3m UK households missing payments in January and those on the lowest incomes being hit hardest, consumers will need more support than ever in 2023.
“As the cost of living crisis continues to bite into household finances, we are calling on businesses in essential sectors – like food, energy and broadband providers – to do more to help customers get a good deal and avoid unnecessary or unfair costs and charges.”
