Household water bills up by 3.5%

The average household water and sewerage bill in England and Wales is to rise by 3.5% over the next year, regulator Ofwat has said.

Households will pay an average of £388 from April 2013 to March 2014.

Ofwat chief executive Regina Finn said that she understood that households were facing financial pressures.

But she said that the increase, half a percentage point higher than the rate of inflation, was not as high as the water companies had wanted.

"Back in 2009, companies wanted bills rises of 10% above inflation. That didn't chime with what customers told us they wanted, so we said they could only increase bills in line with inflation," Ms Finn said.

"We understand that there is huge pressure on household incomes, and any rise is unwelcome. Inflation is driving these increases."

"We will make sure customers get value for money and if companies fall short in delivering their investment promises, we will take action."

Regional differences

The new charges will vary for households depending on their supplier and whether they have a water meter.

On average, households will see their water bill rise by about £13 for the year from April.

Thames Water will see the biggest percentage rise in water and sewerage bills with an increase of 5.5%, leaving households with an average bill of £354, according to Ofwat.

Other customers to see larger than average rises include those of Southern Water, with bills rising by 5.3% with an average payment of £449. Households supplied by Wessex Water will face an average bill of £478 - an increase of 4.9%.

The increased bills will contribute to investment programme worth about £25bn between 2010 and 2015, the regulator added.

Those supplied by South West Water will see bills fall by 7.3% after the government pledged contributions to reduce each household's bill by £50. However, water and sewerage bills in the region remain the highest in the country, with households paying an average of £499.

Last year, prices rose by 5.7%, owing to the higher level of inflation.

However, the Consumer Council for Water, a watchdog which represents customers, suggested that this inflation link had allowed companies to make excessive returns.

"Water companies are making higher profits than expected and they need to give some of this back to their customers," said Dame Yve Buckland, who chairs the watchdog.

"They can limit their own prices or invest more money into services. They should not keep it all for shareholders and investors."