Water bills to rise by more than twice the rate of inflation

Water and sewerage bills in England and Wales are set to rise by an average of 5.5% from the beginning of April, the industry regulator Ofwat announced yesterday.

The increase will mean customers will pay an average of £294 for 2006-07 - up £15 on last year - prompting concerns about the impact on households on low and fixed incomes, which are already facing big rises in energy bills and council tax.

The Consumer Council for Water (CCWater) said it was working with several organisations to persuade the government to help the hardest pressed.

Dame Yve Buckland, CCWater chairwoman, said yesterday: "Although water costs only 72p a day on average, some consumers will struggle to pay their bills, surrounded as they are by other rises for energy, council tax and other services."

The council noted that the government has already introduced a scheme in Northern Ireland under which 200,000 households have been guaranteed that they will not pay more than 3% of their income on water and sewerage charges.

Last week Centrica raised its prices for both gas and electricity by 22%, pushing the average annual bill for dual fuel users to about £1,000.

Ofwat signalled in December 2004 that prices would rise by more than the rate of inflation over the next five years after a price review designed to allow companies to spend more money on renewing or expanding ageing infrastructure.

Though the average increase this year will be 5.5%, there are widespread variations between different areas of England and Wales. South West Water customers, for example, will see bills rise by more than 9%, though they will benefit from a one-off payment from the company as a result of refinancing plans. Other companies with above-average price rises in the pipeline include United Utilities and Wessex Water. At the other end of the scale, Anglian Water and Thames Water are raising prices by 2.4% and 4.6% respectively.

Philip Fletcher, Ofwat's director general, said: "I realise that these bill increases will not be welcome but I want to reassure customers that bills are going up by no more than is necessary.

"Price rises are unavoidable because of rising costs and the new challenges facing water companies."