Water Rates Could Rise by 53% for Some UK Businesses

27th February 2025

The last thing that UK businesses want to hear about is another rise in operating costs, but unfortunately that’s exactly what’s on the horizon from April. According to industry regulator, Ofwat, the typical domestic household will experience an increase of 26% or £123.

However, depending on where your business is based, you could be set for hikes as high as 53% if some providers get their way.

While the increase will be effective over a five-year period, the biggest rise is set to take place this year and slowly ease for the remainder of the term.

Why are these prices going up?

The increases have been put in place with a primary aim of funding a push to clean up rivers and seas that several water companies have been dumping sewage into as part of storm overflow procedures. Providers also point to the general rise in operating costs for most businesses.

Critics meanwhile, suggest that mismanagement of certain water companies has seen them accrue billions in debt, and they are now looking to their customers to shoulder the burden somewhat.

Which areas will pay the most?

While it’s difficult to give an idea of cost to businesses (a car wash will understandably use more water than an office, for example), We can use BBC figures and Ofwat’s data to determine a rough idea of the percentage increase to a typical UK household from 2024-25 to 2029-30.

• Southern Water – 52.8%
• Severn Trent – 46.4%
• Hafren Dyfrdwy – 42%
• Dŵr Cymru –41.7%
• Yorkshire Water – 41.1%
• Portsmouth Water – 36.9%
• Thames Water – 34.8%
• United Utilities – 32.3%
• Anglian Water – 28.5%
• Affinity Water – 25.5%
• South East Water – 23.7%
• South West Water – 22.7%
• South Staffs Water – 21.1%
• Northumbrian Water – 20.8%
• Wessex Water – 20.8%
• SES Water – -2%

So which area could pay 53% extra?

Finding themselves £19bn in debt, Thames Water is hoping to fund essential repairs by increasing their prices by 53%. Ofwat has already given them permission to raise their rates by 35% (excluding inflation), but the water provider is in the process of appealing to increase this. A spokesperson claiming that a rise in bills would be “in the interests of our customers and the environment”.

Already £10bn in debt when Australian bank, Macquarie owned the business, it was said at the time that the debt was down to upgrading sewage infrastructure, but a BBC analysis suggested that billions had been taken out in dividends and loans instead.

What can I do?

Since the UK water industry was privatised in 1989, consumers have faced a problem. Now that water was being handled by the private sector, prices were always likely to rise as shareholders looked to maximise the return on their investment.

The issue with this is that there is often no alternative for customers to move on to. Location has determined which water provider you use, leading to regional monopolisation of water supply.

Depending on location, some UK companies may be able to switch to a different water retailer. Firms such as Everflow, Castle Water, and Business Stream use existing regional water providers’ infrastructures to deliver the same services but can occasionally offer better deals for commercial clients.

If this isn’t an option for you, perhaps it’s time to look at alternative processes that conserve water. Garden centres, for example, may be able to utilise rainwater collected in water butts to water their plants.

Rising bills becoming too much?

If you think your business might struggle to continue in its current form during 2025, you need to seek expert advice now on how you can navigate the future.

We have specialists on hand that can help you to facilitate turnaround strategies, sell your business, or close down your company depending on the best route available to you. Call us on 0800 975 0380, or email advice@forbesburton.com for a free consultation.