Millions of households in England are bracing for higher water bills after the UK’s Competition and Markets Authority (CMA) provisionally approved additional price hikes for five major water companies. The decision, announced on October 9, 2025, comes after Anglian, Northumbrian, Southern, Wessex, and South East Water challenged previous limits set by the regulator Ofwat, arguing that the increases were insufficient to fund urgently needed infrastructure improvements.
According to reporting by the BBC, these five companies—serving more than seven million households and businesses—will now be able to raise bills by an average of 3% more than the 36% increase already set to take effect over the next five years. For the average customer, that’s an extra £12 per year, or roughly £1 per month, on top of already steeply rising costs.
The companies had originally pushed for much larger increases, seeking permission to add a total of £2.7 billion in revenue. But the CMA’s panel of independent experts allowed only 21% of that request, which equates to an additional £556 million. The panel’s chair, Kirstin Baker, explained their reasoning: “We’ve found that water companies’ requests for significant bill increases, on top of those allowed by Ofwat, are largely unjustified. We understand the real pressure on household budgets and have worked to keep increases to a minimum, while still ensuring there is funding to deliver essential improvements at reasonable cost.”
Breaking down the permitted increases, Anglian and Northumbrian Water can now raise bills by a further 1%, Southern by 3%, South East by 4%, and Wessex by 5%. These percentages reflect differences in the companies’ investment needs and financial circumstances, as assessed by the CMA. The proposals remain provisional, however, with Ofwat and the water firms themselves given the opportunity to respond before a final decision is reached in the coming months.
The backdrop to this decision is a water industry under intense pressure. Much of England’s water infrastructure is outdated, and authorities have ordered companies to address the problem—especially after a year in which serious pollution incidents linked to water firms rose by about 60%, according to the Environment Agency. Rivers and water sources have been hit hard, and the public’s patience is wearing thin.
Water companies finance a large portion of their investment plans through borrowing, and the recent rise in interest rates has made those loans more expensive. The CMA acknowledged this reality, noting that part of the reason for allowing the extra increase was to help companies cope with higher borrowing costs. Still, the regulator stood firm on limiting the scale of the hikes, saying that most of the requested increases were not warranted by the evidence presented.
Notably absent from this round of decisions is Thames Water, the country’s largest and most troubled water company. Thames Water had also appealed for higher price rises but has postponed its case until late October while it attempts to secure a rescue bid. The company’s financial struggles have drawn national attention, with many observers seeing them as a warning sign for the sector as a whole.
For customers, the news is a bitter pill—especially at a time when many households are already feeling the squeeze from rising living costs. Anne Pardoe of Citizens Advice didn’t mince words in her reaction: “Ramping up water bills, when people up and down the country are already rationing showers and cutting down on laundry, is going to stretch budgets beyond breaking point.” She called for a national social tariff to help low-income households afford essential bills, pointing out that similar schemes exist for broadband and energy services, though eligibility criteria vary widely.
Water Minister Emma Hardy echoed the need for support, stating she expected every water company to “offer proper support to anyone struggling to pay.” With household budgets under strain, the call for targeted financial assistance is growing louder—and not just from advocacy groups. Some water companies already offer social tariffs, but campaigners argue that a consistent, nationwide approach is needed to prevent the most vulnerable from falling behind on payments.
The debate over who should bear the cost of upgrading England’s water infrastructure is far from settled. When pressed by the BBC’s Today programme on why the companies themselves couldn’t cover the needed investments, David Henderson, chief executive of Water UK (which represents the industry), pointed to the sector’s financial challenges. “They [investors] don’t have to put money into this sector, they don’t even have to put money into this country,” Henderson said. He noted that eight water firms made a loss in 2024 and added, “Many haven’t made a profit in years. This isn’t an industry awash with cash. It is an industry providing vital infrastructure.”
Shareholders, Henderson insisted, have already invested heavily in the sector. Yet critics argue that years of underinvestment and generous dividends have left the industry ill-prepared for today’s challenges. The CMA’s decision attempts to strike a balance—providing enough funding for essential improvements without placing an unreasonable burden on customers.
For now, the outcome is a complex compromise. The average household served by one of the five companies will see their bills rise by an extra £1 per month, on top of the previously agreed increases. That may not sound like much in isolation, but for families already rationing water use or struggling to make ends meet, it’s another unwelcome cost.
Meanwhile, the industry faces mounting demands to clean up its act, both literally and figuratively. The spike in pollution incidents has fueled public anger and prompted tough talk from regulators and politicians alike. Water companies are under orders to fix aging pipes and treatment plants, but doing so requires billions in investment—money that, one way or another, has to come from somewhere.
As the CMA’s provisional proposals move toward a final decision, all eyes will be on the responses from Ofwat, the water firms, and consumer advocates. The stakes are high: get it wrong, and the country could face further environmental damage, financial hardship for households, or both. Get it right, and England might just see a path toward cleaner rivers, more reliable water service, and a fairer deal for customers.
With the debate far from over, one thing is clear: the price of water—and the true cost of keeping it flowing—will remain a contentious issue for months, if not years, to come.
