Since April 2025, our water bills have gone up by roughly 58%.
It is legal, but is it fair?
What happened
In April 2025, the average combined household bill rose by 46.7%2 and in April 2026, a further 8% was added on top2.
| Charge | 2024-25 | 2025-26 | 2026-27 | 2-yr change |
|---|---|---|---|---|
| Water supply, per cubic metre | £1.958 | £2.753 | £3.518 | +79.7% |
| Water supply, annual standing charge | £23.96 | £38.06 | £46.70 | +94.9% |
| Wastewater, per cubic metre | £2.461 | £3.794 | £3.545 | +44.0% |
| Wastewater, annual standing charge | £27.76 | £43.48 | £49.27 | +77.5% |
| Surface water drainage, annual | £25.98 | £40.88 | £50.00 | +92.5% |
| Total per cubic metre | £4.419 | £6.547 | £7.063 | +59.8% |
| Total annual fixed charges | £77.70 | £122.42 | £145.97 | +87.9% |
For an average Southern Water household, their bill rose from £420 to about £665 (58%).
For households that only take water supply, the two-year compound is nearer to 85%2.
The decade prior
From 2015 to 2025 water bills were held broadly flat.
Southern Water underinvested in its pipes and treatment works, misreported its performance to the regulator, and kept paying dividends to its owners. In 2019, Ofwat, the body that regulates the industry, fined Southern Water £126 million for deliberately misreporting wastewater performance between 2010 and 201716.
Of that, £123 million was returned to customers as a rebate over the five years of bills from 2020 to 202516. The rebate was "baked-in", not shown as a separate line on anyone's bill.
In 2021, Southern Water was fined a further £90 million in the Crown Court for 6,971 illegal sewage discharges between 2010 and 201517. The largest criminal fine ever issued in the water sector.
New owners
In 2021, majority ownership of the group moved to a consortium of investment funds managed by Macquarie Asset Management. Between 2021 and 2023, those funds injected £1.65 billion of new equity into the group7.
Of that £1.65 billion, about £905 million reached the water company itself (the part that owns the pipes and holds the licence from the regulator). The remaining £745 million stayed at the holding companies that sit above the water company8.
Southern Water hasn't paid its owners a dividend since 20177. Under the terms of its licence, it also can't send cash up to the holding companies above it until its financial position recovers.
How the new price was set
Ofwat sets the price cap for each water company every five years. Its decision for 2025 to 2030 was published in December 20243.
Southern Water and four other companies rejected it, arguing the cap was too low. Their appeal went to the Competition and Markets Authority, an independent body that handles disputes with the regulator. In March 2026 it settled on a higher cap than Ofwat had allowed4.
Illustrative example: Southern Water asked for an average household bill of £710. Ofwat offered £620. The Competition and Markets Authority settled at £641. These are company-wide averages in 2022-23 prices, not individual bills.
All of this, all at once
- A decade of flat bills
- A front-loaded, real-terms rise of roughly 48%
- An appeal adding another 2.5%
- A consumer rebate that quietly ran out in the same month
This is why the price hike feels so high, because it is.
Legal is not fair
Ofwat approved it and the Competition and Markets Authority upheld it, so the rise is legal. But is it fair?
You cannot switch water supplier. There is no retail market for households. Southern Water is the legal monopoly for wastewater across Kent, and for water supply across large parts of it. Its ultimate owner is a group of private investment funds.
Who should pay for a decade of misconduct and under-investment?
The regulator will change
In February 2026 the government published the water White Paper, A new vision for water, setting out its intention to abolish Ofwat and bring the water functions currently split between Ofwat, the Environment Agency, Natural England and the Drinking Water Inspectorate into a single new regulator18. That reform will not change the price controls already in force for 2025 to 2030.
What comes next
Ofwat's determination keeps Southern Water's bills roughly flat in real terms from 2026 to 2030, after the front-loaded first-year jump. Cash bills will still rise with inflation. The next price review is due in 2029 and will set prices for 2030 to 2035. By then the planned regulator overhaul will be in place. What those rules actually look like is for Parliament to decide.
Underinvestment. Misreporting. Illegal sewage discharges. Two regulatory fines.
You will still have no other option.