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Debt fears as water bills rise 3.5%
12:50pm Tuesday 5th February 2013 in Business Daily
HOUSEHOLDS in England and Wales are facing more pressure in the form of an average 3.5% increase on their water and sewerage bill as a debt advice service warned it took a record number of related calls last year.
Regulator Ofwat said the average bill will rise to £388 from April this year to March next year - 0.5% above the rate of inflation.
Comparison website uSwitch.com said the wave of utility bill increases "will leave many households struggling to stay afloat", while National Debtline said the number of calls it took last year relating to water bills was higher than those for rent or mortgage difficulties.
National Debtline said it took a record 19,667 calls for help with water debts last year, up from 12,226 in 2010 and 597 in 2003. The figure is an increase of 251% since 2007. A spokesman said: "It's one of the fastest-growing debt problems we're dealing with."
USwitch said the increase came months after energy bills soared to a record high of an average £1,352 a year, with households needing to find an extra £107 a year to pay for the two utilities. USwitch director of consumer policy Ann Robinson said: "Ofwat's announcement follows a wave of energy price hikes and will leave many households struggling to stay afloat. Households now face forking out £1,740 a year on energy, water and sewerage alone.
"With incomes remaining stagnant, this will be another squeeze on family finances and will no doubt cause sacrifice and hardship for many. There really is no need to pay over the odds for any household bills and there are a couple of simple but effective steps to help protect yourself from rising prices. While consumers might not have the choice of switching to a cheaper water supplier, they do have the option of moving to a water meter which could save them £54 a year. As a rule of thumb, if there are more bedrooms than people in a household then a water meter could be more cost effective."
Ofwat chief executive Regina Finn said: "Back in 2009, companies wanted bill 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. 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," Ms Finn added. "In the past seven years, we have made companies pay out around £550 million where they have underperformed."
The new charges will vary for households depending on their supplier and whether they have a water meter, Ofwat said. The increased bills will help pay for an investment programme worth about £25 billion between 2010 and 2015, the regulator added.
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. Southern Water bills will rise by 5.3% with an average payment of £449 while households supplied by Wessex Water will face an average bill of £478 - an increase of 4.9%.
© Press Association 2013
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