Water bills set to rise for millions of households after watchdog approves £3.4bn plan

Water bills set to rise for millions of households after watchdog approves £3.4bn planSee more This is Money on Google - save us as a Preferred Source Updated: 05:31 EDT, 13 August 2026 Thames Water is among five water companies given the provisional green light by the industry watchdog to increase bills for millions of households again. It comes as part of Ofwat's plans to allow suppliers to spend an extra £3.4billion for new infrastructure projects. The water regulator said five of 13 suppliers across England and Wales will be allowed to raise charges for customers to add the additional investment by the end of the decade. Ofwat said it had approved £3.4billion for new projects, including infrastructure for new housing, data centres, increased capacity and measures to make drinking water safer. That will see higher bills for households that already faced a 5.4 per cent hike in April. The largest increases in bills will be felt by Southern Water customers, who will pay £43 more next year and an extra £37 a more by 2029. Thames Water will increase water bills by £3 in 2027 and £5 a year by 2029, Severn Trent by £3 and £5, and Wessex Water by £4 and £7. South East Water will raise bills by £1 in 2029. Bigger bills: Thames Water is among five water companies given the provisional go-ahead by industry watchdog Ofwat to increase bills furtherThe update followed a three-month review by Ofwat, with the 13 businesses originally putting forward requests for further investment of £4.3billion.Ofwat will now consult on the draft decision until September 24, with a final verdict due in December.Around half of households in Britain are under a hosepipe ban and swathes of areas are in drought. Some of the new spending that will be allowed will be added to bills after the next spending review in 2030.Ofwat said it had rejected £752million of spending plans, in some cases because water suppliers had not delivered on work that had already been funded.Helen Campbell, executive director for delivery at Ofwat, said: 'The newly agreed funding will help unlock much-needed new housing development and boost business growth across a range of sectors, as well as improving drinking water quality and the removal of PFAS and forever chemicals. 'We will track performance to ensure companies are delivering the expected improvements for customers and the environment. If they don’t, expenditure can be clawed back.'Environment Secretary Angela Eagle said: 'I know that households across the country are watching every pound and I share their frustration that years of underinvestment and toothless regulation has led to this.'We have already ringfenced money earmarked for new infrastructure so it can only be spent on fixing the problems, and will go further by fundamentally reforming the water sector so that it works for the public; keeping bills as low as they can be, and delivering higher standards, better performance and cleaner waterways.'DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you