Water regulator Ofwat has once again instructed water suppliers across the UK to refund their customers via a water bill discount.
The order comes after the 17 largest water and wastewater companies in England and Wales once again failed to hit targets for key issues such as sewer flooding, leaks and supply interruptions.
This marks the fourth year in a row that water suppliers have been penalised in this way. For the last two years, no company has achieved the top performance rating, although four companies have improved since last year. In total, water suppliers have been charged performance penalties of £430 million since 2020.
Why are suppliers being made to refund customers?
Ofwat assesses water suppliers’ performance across a range of factors, setting specific performance targets. For example, suppliers were charged with reducing pollution incidents by 30% between 2020 and 2025.
Instead, this figure fell by 15% until last year, when record numbers of incidents returned averages to pre-2020 levels.
As a penalty for failing to hit this and other targets, the 13 worst-performing suppliers must repay customers £157.6 million in the form of a water bill discount.
Which suppliers must offer a water bill discount?
13 water companies across England and Wales will have to repay customers in the 2025-2026 billing year.
The largest repayment is from Thames Water, who will offer customers a collective water bill discount of £56.8 million. The next two largest fines will be paid by Anglian water (£38.1 million) and Yorkshire Water (£36.0 million).
You can see a full list of the suppliers who will be refunding their customers and the refund totals below.
| Company | Bill refunds (£m) |
|---|---|
| Thames Water | 56.8 |
| Anglian Water | 38.1 |
| Yorkshire Water | 36.0 |
| Southern Water | 31.9 |
| Welsh Water | 24.1 |
| South West Water | 17.4 |
| South East Water | 8.0 |
| Wessex Water | 5.3 |
| Affinity Water | 5.2 |
| Bristol Water | 1.9 |
| Portsmouth Water | 1.1 |
| South Staffs Water | 0.7 |
| Hafren Dyfrdwy | 0.2 |
Will I receive a water bill discount?
If you’re supplied by one of the suppliers on the list above, the reimbursement will automatically be applied to your bill in the 2025-2026 billing year. However, the value of the fines is low compared to the number of customers that each supplier services.
Thames Water, for example, has a customer base of more than 16 million people. With the discount split between every household, experts believe the total saving will be less than £10 per customer.
Water bills are also set to increase over the next five years as water companies invest in improving their infrastructure. By 2030, the average customer will see their bills increase by £156 a year.
In the mean time, we’ll have to see if suppliers continue to be fined by Ofwat and offer water bill discounts to their customers, or if the investment helps resolve the long-term problem for which they are being fined.
