UK water tariffs surge with 8.4% average price increase, GWI anticipates further increases in 2024

Global Water Intelligence (GWI) recently released Global Water Tariff Survey 2023 revealed the average monthly tariff in the UK currently stands at £59.52. The average increase from 2022-2023 for UK tariffs was 8.36%, compared to 3.83% last year. This increase exceeds the 2023 Western European regional average of 5.2%. London was the city with highest increase, reportedly reaching 11.58%. However, the most expensive UK city for water services is said to Exeter, where residents face a combined tariff of $106.89/month.

Stormwater tariffs in the UK account around 10% of the total tariff on average. Wastewater in London is being charged at a lower rate than water due to a penalty applied to Thames Water for poor sewage services. This year, UK utilities have come under fire due to sewage spillages in rivers and on beaches, according to GWI survey. Rates across the UK are expected to rise steeply in 2024, with water utilities advocating for a 40% increase to address environmental pollution issues and meet capital requirements imposed by regulators.

UK water companies plan to invest £96bn from 2025-2030, an 88% increase compared to the previous five years. These investments will be allocated to infrastructure upgrades, including a 28% reduction in leakage, elimination of an average of 140,000 sewage spills per year, and the removal of a million tonnes of phosphorus from English rivers. Additionally, these funds will support the construction of 28 wetlands, the development of up to 10 new reservoirs, and major national water transfer schemes, with the overarching goal of improving water quality and biodiversity, as well as aiding vulnerable customers.

To finance these improvements, water companies propose increasing bills in England by £84 per annum in 2025, rising to £156 in 2030. The specific figures may vary by company based on local circumstances. The proposed increases represent a 19%-35% rise over average 2023-2024 water bills potentially higher if inflation persists. The negotiations between Ofwat — the water regulator in England and Wales — and the water companies will focus on the ambition, quality, and detail of their plans.

The Global Water Tariff Survey 2023 report offers over a decade’s worth of tariff data on UK utilities, which can be dissected into water, wastewater, and stormwater segments.  

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