From today onwards water companies will be required to pay households in England up to £2,000 in compensation payments for water service failures including disruptions to supply, sewer flooding and low pressure.

The new levels of compensation payments are set out in the Guaranteed Standards Scheme (GSS) and represent the first increase in compensation rates in 25 years.

Announcing the update to the GSS, Environment Secretary Steve Reed said:

“Too many water companies are letting down their customers – with leaking pipes, poor water supply and low water pressure.

“The Government is holding water companies to account by making them put money back into people’s pockets when they fail their customers.

“The government is also working with water companies to expand the list of circumstances that will trigger compensation payments. Compensation for when customers are asked to boil their water due to contaminated supply will come into force later this year.”

The GSS sets out a baseline for customer service in the water sector which will see customer compensation for poor service in a number of areas, including:

• sewer flooding compensation doubled from £1,000 to up to £2,000
• consistent low water pressure - automatically eligible to receive up to £250 - a tenfold increase compared to the previous compensation rate of £25

The introduction of the increased rates follows a public consultation by the Department for Environment, Food and Rural Affairs on changes to the GSS last year to improve baseline customer service standards and protection in the water and sewerage sector.

Mike Keil, Chief Executive of the Consumer Council for Water (CCW), commented:

“Customers expect to be treated fairly when their water company lets them down, so we’re delighted the Government has moved at pace to strengthen service standards.”

“This should give people peace of mind they now have far stronger protection from a much broader range of water company service failures - from the slow installation of water meters to the mishandling of debt recovery. As well as bolstering payments for thousands of customers, these changes mark an important step towards restoring trust in the water sector which is at an all-time low.”

The proposed changes included roughly doubling payment values contained within the scheme, and broadening the set of standards which warrant payments to provide more comprehensive protection from service disruption for customers in England.

The updates to the GSS cover 3 key areas in relation to the scheme:

• Uprating payment amounts
• Improving and clarifying existing standards within the scheme
• Introducing additional standards which are not at present a statutory provision of the scheme

The consultation also included potential changes to the procedures for updating the GSS to future-proof the level of protection it offers to customers and ensure that standards can be adjusted with flexibility to future circumstances.

David Black, Chief Executive of Ofwat said:

“We welcome these improvements to guaranteed standards and payments for customers.

“When customers suffer from problems like low pressure, disruptions to supply or sewer flooding they can experience major stress and inconvenience, and payment amounts must recognise the disruption to their lives when standards are not met.

“These new changes are another way to make sure customers are protected when companies get it wrong.”

Click here to download the Guaranteed Service Scheme summary of standards & conditions 2 July 2025