Ofwat has today confirmed the timetable for Thames Water penalties payment plan following the publication on 28 May 2025 of the regulator’s final decisions for two enforcement cases against Thames Water.

The decisions included imposing two penalties on the company, one of £104.5 million from the investigation into its wastewater business, and one of £18.2 million from the investigation into dividend payments the company had made.

While the penalties were originally due to be paid by 20 August 2025, legislation sets out that a company can apply to Ofwat to request a payment plan for an enforcement penalty it has received.

Ofwat has considered an application from the company and has now agreed a payment plan with Thames Water for the payment of these penalties.

The plan will see 20% of the two total penalties paid no later than 30 September 2025, a sum of £24.5 million.

The payment of the remaining 80% of the penalties will take place on the earliest of three possible events:

• 30 calendar days after the implementation of a restructuring of the company’s finances such that there is improved cash liquidity in the business;
• If the company enters the Special Administration Regime (SAR) under the Water Industry Act 1991, 30 calendar days after it exits SAR; or
• A backstop date of 31 March 2030.

Lynn Parker, Senior Director of Enforcement at Ofwat said:

“This payment plan continues to hold Thames Water to account for their failures but also recognises the ongoing equity raise and recapitalisation process. Our focus remains on ensuring that the company takes the right steps to deliver a turnaround in its operational performance and strengthen its financial resilience to the benefit of customers.”

Commenting on the payment plan, Thames Water said:

“These penalties will not be funded by customer bills.

“The company continues to work closely with stakeholders to secure a market-led recapitalisation which delivers for customers and the environment as soon as practicable.”