5 UK water companies get the go-ahead to raise bills from April 2027
Key Points
- Ofwat's 2026 cost change draft determinations allow Severn Trent Water, Southern Water, Thames Water, Wessex Water and South East Water to recover extra costs from customers starting April 2027.
- Southern Water customers face the biggest rise at around £43 above the price review level in 2027-28, followed by Wessex at £4, Severn Trent and Thames at £3 each, and South East Water at under £1.
- Across the sector Ofwat proposes £3.4 billion of additional spending between 2025 and 2035, cut down from the £4.3 billion companies asked for.
- Companies not receiving in-period funding still recover their allowances, but from April 2030 rather than 2027.
- Final determinations arrive in December 2026 and will combine the cost change decisions with in-period outcome delivery incentive payments; the consultation closes 24 September 2026.
Ofwat has proposed allowing Severn Trent Water, Southern Water, Thames Water, Wessex Water and South East Water to recover additional costs from customers, pushing bills up from April 2027.
The decision forms part of the regulator’s 2026 cost change draft determinations, published on Thursday (13 August).
The process lets water companies apply for extra funding mid-period for costs that were still uncertain when price controls were set at the 2024 price review.
- Southern Water customers face by far the largest increase. Ofwat’s illustrative figures put the average bill £43 higher in 2027-28 than the level set at the price review, easing to £37 above that level by 2029-30.
- Wessex Water customers pay £4 more in 2027-28 rising to £7 by 2029-30,
- Severn Trent Water and Thames Water customers each pay £3 more in 2027-28 rising to £5.
- South East Water customers see no increase in 2027-28 and £1 by 2029-30.
Ofwat is careful to frame these as estimates for an average bill across all customer classes, with the increase varying between classes. Inflation and existing price control adjustments also feed into what households actually pay.
13 companies submitted claims this year. Affinity Water, Portsmouth Water and South Staffs Water submitted none.
Across the sector Ofwat proposes allowing £3.4 billion of additional expenditure between 2025 and 2035, including £1,247 million for asset health, £477 million for growth, £772 million for large gated schemes, £331 million for major project development costs and £34 million for PFAS removal.
A second Ofwat process running in parallel will determine in-period outcome delivery incentive payments for 2025-26, which can also move a company’s 2027-28 allowed revenue.
Final determinations for both processes land in December 2026, and Ofwat says those determinations will show the combined impact.
The regulator has told the five companies receiving in-period funding to set out or update their assessment of what both processes together mean for bill volatility when they respond to the draft determinations, and has asked any company hoping to renew its case for in-period funding to do the same.
Ofwat is also proposing a clawback mechanism to stop customers paying twice for asset health work.
Where a company receives extra asset health funding but underspends the base allowance it already had, that underspend will be set against the new allowance and returned to customers.
