How our charges are set

Discover how we set out our charges and learn about the different factors that influence how much you pay for our services.

Every five years the water industry regulator, Ofwat, runs a process (known as a price review) to determine the amount that can be collected from customers through bills.

For each five-year period, we prepare a business plan which sets out our proposed commitments, investments and how much this will cost.

Our customers play a very important part in creating our business plan. We consult with customers at length and take their views into account. Ofwat reviews our business plan to inform the appropriate amount we can collect from customers over the five-year period.

Ofwat then sets a price formula that enables us to put the plan into practice while limiting increases in our charges each year. This formula uses the November rate for inflation to set prices for the following year. The water industry uses the Consumer Price Index including Housing Costs (CPIH) as the measure for inflation.

This process caps the overall amount we can collect from customers. Within the cap agreed with Ofwat we may need to change individual charges by different amounts. We do this so that charges to customers are fair in reflecting the cost of the services provided. This means that the increase in unmetered charges can be less or more than that for metered services.

Additionally, your bill will change by more or less, depending on the service you receive from us (eg, water, wastewater or both), how much water you use if your property is metered or the rateable value of your property if it is unmetered.

Since 2015 Ofwat has said that if we receive more from customers’ bills than we had expected, for example, if a dry summer prompts customers in metered properties to use more water in their gardens, the following year we must return that extra amount to customers through slightly lower bills than we had planned.

Finally, where we fail to meet our commitments to the services we offer, we return money to customers through lower bills. Similarly, where we’ve exceeded these commitments, we are rewarded.

Charges applicable from 1 April every year are published by 1 February.

2024-25 Charges

Our charges increased as of 1 April 2024. This is because inflation remains high (although not as high as last year). We are also collecting the reward for our industry-leading performance in 2021-22 performance, which we deferred for a year to help customers during the immediate cost-of-living crisis. This means that bills went up by less than would otherwise have been the case in 2023-24.

Overall, this means that, compared to 2023-24, a typical combined water and sewerage bill for a two-person household with a water meter increased by around £5 per month. A typical household bill for those not on a meter increased by around £8 per month.

2025-2026 Charges

Over the last year, we have been going through the process with Ofwat to determine bills for the next five-year period, starting from April 2025.

Ofwat has now issued its final decision for the 2025-30 period, setting out how much we can collect from customers from charges. Ofwat has approved £2.9 billion of new investment over the 2025-30 period. This investment will deliver service improvements across our water and sewerage networks.

This means that bills will increase as of April 2025. We are currently finalising our charges to apply from 1 April onwards, and we will publish these in full by the start of February 2025.

You can find out more about why bills are set to increase and how much by.