Why UK water bills are rising sharply in 2025 and what happens next

Households across England and Wales have seen one of the largest annual water bill increases in recent memory. In 2025, the debate over water prices, investment and pollution reached a breaking point. The regulator Ofwat says the hikes are needed to fix ageing infrastructure, but campaigners argue that companies are passing the cost of their own failures to consumers.

How much water bills have risen

According to Water UK, the average household water and sewerage bill in England and Wales rose to £493 per year from April 2025 — an increase of 6.1% or about £27 on the previous year.

Source: Water UK – Average household water and sewerage bills 2025/26

Some regions saw far higher rises. Southern Water’s average bills went up by more than 9%, and Thames Water by 7.8%, reflecting larger infrastructure investment programmes and pollution penalties.

Scotland, which operates a public water utility, saw a smaller rise of around 3.5%.

Source: Scottish Water – Household charges 2025/26

Why bills are increasing so quickly

The main driver is Ofwat’s latest price review (PR24), which allows companies to raise bills to fund a record £96 billion investment programme between 2025 and 2030. This money is supposed to pay for reducing leaks, expanding storm overflow capacity, and upgrading treatment plants.

Source: Ofwat – PR24 draft determinations 2025–2030

Water companies have argued that after years of underinvestment and tighter dividends, large increases are unavoidable. Energy costs, wage inflation, and stricter environmental rules under the Environment Act 2021 have all pushed up operational costs.

Environmental concerns and public backlash

The bill rises come amid ongoing public anger over sewage spills and river pollution. Environment Agency data shows that in 2024 there were 460,000 sewage discharges in England, lasting a combined 3.6 million hours, despite government pressure to cut them.

Source: Environment Agency – Storm overflow annual data 2024

Public confidence in the sector has collapsed. A May 2025 YouGov poll found that 72% of Britons support re-nationalising the water industry. (yougov.co.uk)

How Ofwat is responding

In its 2025 draft determinations, Ofwat approved investment increases but also tightened performance targets. Companies that miss leakage or pollution reduction goals could lose up to £2 billion in penalties over the next five years. The regulator has also introduced stronger transparency requirements for executive pay and dividends.

Source: Ofwat – Strengthening accountability and performance incentives

Still, critics say the regulator is moving too slowly. Campaign group Surfers Against Sewage called the bill hikes “a reward for failure”, arguing that consumers should not pay for the clean-up of problems caused by decades of under-investment and dividend payouts.

Source: Surfers Against Sewage – Press release on 2025 water bill rises

The long-term outlook

Ofwat says the 2025–2030 spending plans will deliver:

• 24% fewer storm overflow spills by 2030.
• 18% reduction in leakage.
• 5,000 km of river habitat improvements.

But much depends on companies actually delivering the projects on time. Thames Water, still under financial pressure after emergency funding in 2024, must meet tougher debt-reduction milestones to keep its licence.

Analysts at Moody’s warn that if inflation remains near 3.5%, real water bills could rise by another 15–20% by the end of the decade. (moodys.com)

What households can do

While structural changes take years, there are steps consumers can take now:

• Check if you could save on a water meter – households with low occupancy often pay less.
• Fix leaks early – dripping taps and faulty toilets can waste thousands of litres a year.
• Apply for social tariffs – most companies offer discounts of 20–50% for low-income households.
• Use water-saving devices – simple measures like cistern bags, low-flow showerheads, and efficient appliances can reduce consumption.

Source: CCW – Help with your water bill

The bottom line

The UK’s water system faces a difficult trade-off: rebuilding crumbling infrastructure and cutting pollution will cost billions, but the public’s patience has run out. The 2025 price hikes mark the start of a long-term adjustment in how the sector is financed.

Without clearer accountability and faster improvements in water quality, the debate over whether England’s water industry should remain in private hands is likely to dominate the political agenda well beyond 2025.

References:

• Water UK – Average household water and sewerage bills 2025/26
• Scottish Water – Household charges 2025/26
• Ofwat – PR24 draft determinations 2025–2030
• Environment Agency – Storm overflow annual data 2024
• Surfers Against Sewage – Press release on 2025 water bill rises
• CCW – Help with your water bill
• YouGov – UK public opinion on water nationalisation