Millions of households across England are set to pay higher water bills after the Competition and Markets Authority (CMA) provisionally approved additional price rises for five major water companies.
The move will allow suppliers to charge customers an extra £556 million over the next five years — though this represents only 21% of the £2.7 billion they had sought.
The CMA panel, an independent group of experts, said the decision balanced consumer protection with the need to fund essential upgrades. The five companies affected — Anglian, Northumbrian, Southern, Wessex and South East Water — serve nearly 15 million customers across England. Collectively, their approved increases will add about 3% to household bills on top of the 24% rise already authorised by the regulator Ofwat.
The companies had appealed to the CMA in February, arguing that higher prices were necessary to meet environmental standards and fund investment. However, the CMA largely rejected these claims, allowing limited increases primarily to reflect higher interest rates since Ofwat’s 2023 decision.
Anglian Water, which serves the east of England, had requested to raise the average annual household bill to £649 — a 10% jump — but will be permitted only a 1% rise to £599. Northumbrian Water sought a 6% increase to £515 but will be allowed just 1%, at £495. South East Water asked for an 18% rise but secured 4%, while Southern Water’s proposed 15% hike was cut to 3%. Wessex Water received the largest proportional approval, a 5% rise instead of the 8% it requested.
Kirstin Baker, chair of the CMA group, said: “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.”
The decision follows years of public anger over sewage leaks and pollution incidents by privatised water companies. Water minister Emma Hardy said she understood “the public’s anger over bill rises” and stressed that investment must go towards infrastructure upgrades rather than executive bonuses.
Environmental campaigners criticised the ruling, warning that customers would bear the financial burden while rivers continued to be polluted. James Wallace, chief executive of River Action, said: “Millions of households in England face higher bills while rivers continue to suffer from mismanagement by privatised water companies.”
Consumer groups also expressed concern that the CMA had permitted higher investor returns without ensuring visible improvements. Mike Keil, chief executive of the Consumer Council for Water, warned: “There is a danger the customers of these companies will end up paying more without seeing any additional improvements in return.”
The ruling comes amid wider scrutiny of the water sector, which has faced growing political and public pressure over environmental failures and corporate governance. Thames Water — the largest supplier in the UK — is still negotiating with Ofwat over its own restructuring plan and could seek up to £4 billion in further investment to reduce its debt burden and avoid temporary government control.
