Five Water Firms Get Green Light for Fresh Bill Hikes up to 5%
On October 9, 2025, the UK’s Competition and Markets Authority (CMA) approved additional bill increases for five major water companies: Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water. These firms had appealed to raise their charges beyond the limits set by the industry regulator, Ofwat. While Ofwat had already approved a 36% increase over five years, the CMA granted an extra 1% to 5% increase, totaling £556 million over five years. This decision affects approximately 14.7 million households.
The water companies argued that the additional revenue was necessary to meet environmental standards, reduce sewage pollution, and support infrastructure upgrades. However, the CMA rejected nearly 80% of the requested increases, deeming them largely unjustified. The decision has sparked public backlash, with critics highlighting concerns over rising bills, pollution, and executive pay. The government has acknowledged systemic issues in the water industry and proposed regulatory reforms, including replacing Ofwat and establishing new regional water authorities and a customer ombudsman.
Let’s look into the details of the CMA’s decision, its implications for consumers, and the broader context of the UK’s water sector challenges.
The Firms Involved
The five water companies affected by the Competition and Markets Authority’s (CMA) provisional decision are Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water. Together, they serve approximately 14.7 million households and businesses across England. These companies had appealed to the CMA for additional revenue beyond the 36% increase previously approved by Ofwat, the industry regulator.
Their requests ranged from 8% to 18% additional increases, totaling £2.7 billion. However, the CMA approved only 21% of this amount, equating to an extra £556 million over five years. This decision means that customers of these companies will see an average increase of 3% on top of the previously approved 24% rise.
Regulatory Approval Process
In December 2024, Ofwat determined that water bills should rise by an average of 36% over five years, from 2025 to 2030. This decision was based on the companies’ proposals to fund infrastructure improvements, reduce pollution, and meet environmental targets.
However, five companies, Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water, disagreed with Ofwat’s determinations and exercised their legal right to request a redetermination by the CMA.
The CMA’s Independent Group of experts reviewed the appeals and found that the companies’ requests for significant bill increases were largely unjustified. As a result, the CMA approved only a 3% increase in bills, amounting to an additional £556 million in revenue. This provisional decision is expected to be finalized by March 2026 after further consultation.
Reasons Behind the Bill Hikes
The water companies argued that the additional revenue was necessary to meet regulatory requirements, including reducing sewage pollution, upgrading infrastructure, and achieving environmental targets. They also cited increased financing costs and the need to provide a reasonable return to investors.
However, the CMA rejected nearly 80% of the requested increases, deeming them largely unjustified. The CMA’s decision reflects a balance between ensuring that companies have sufficient funding to deliver essential improvements and protecting consumers from excessive bill increases.
Impact on Consumers
The CMA’s decision means that customers of the five affected water companies will see an average increase of 3% on top of the previously approved 24% rise. For example, Wessex Water customers will experience a total increase of 5%, bringing their average annual bills to £622.
Southern Water customers will face a 3% increase, resulting in average bills of £638. South East Water customers will see a 4% rise, bringing their bills to £286. Anglian and Northumbrian Water customers will experience the lowest increases, at 1%, resulting in average bills of £599 and £495, respectively.
Industry Perspective
The water companies have expressed disappointment with the CMA’s provisional decision, arguing that the approved increases are insufficient to meet the necessary investments in infrastructure and environmental improvements. They contend that the additional revenue is essential to deliver reliable services, reduce pollution, and achieve regulatory targets. The companies have indicated that they may consider further appeals or alternative funding arrangements to address their financial needs.
Public and Political Reactions
The CMA’s decision has sparked public and political criticism. Consumer groups have expressed concern that the approved increases will lead to higher bills for households already facing financial pressures.
Environmental advocates have also raised concerns about the continued pollution and underinvestment in infrastructure, despite the approved bill increases. Politicians have called for further scrutiny of the water sector and consideration of regulatory reforms to ensure that companies meet their environmental obligations and deliver value for money to consumers.
Comparisons & Context
The CMA’s decision is part of a broader trend of increasing water bills in the UK. In December 2024, Ofwat approved a 36% increase in water bills over five years. The additional 3% approved by the CMA brings the total increase for the affected companies to 39%.
This follows a pattern of rising utility costs, with other sectors also experiencing price hikes. The water sector’s challenges, including pollution, underinvestment, and high levels of debt, have contributed to the need for higher bills to fund necessary improvements.
Wrap Up
The CMA’s provisional decision to approve a 3% increase in water bills for five water firms highlights the ongoing challenges in balancing the financial needs of water companies with the protection of consumers. While the approved increases are lower than the companies’ requests, they still represent a significant financial burden for households.
The decision underscores the need for continued scrutiny of the water sector and consideration of regulatory reforms to ensure that companies meet their environmental obligations and deliver value for money to consumers.
Frequently Asked Questions (FAQs)
Water bills in the UK are rising in 2025 because five companies got approval for extra charges to improve infrastructure, reduce pollution, and meet environmental targets.
On October 9, 2025, the CMA approved higher bills for Anglian Water, Northumbrian Water, South East Water, Southern Water, and Wessex Water to cover costs and improvements.
Most customers will see a 1% to 5% increase in 2025, depending on their company. The total rise includes earlier approved increases, affecting household and business bills.
Disclaimer: The above information is based on current market data, which is subject to change, and does not constitute financial advice. Always do your research.
