New research by water sector regulator Ofwat shows that more customers are struggling with household bills and that two-thirds expect their situation to worsen in the coming year.
According to Ofwat’s Cost of Living – Wave 2 report published today, many customers are borrowing money from friends and family, taking out loans or getting deeper into debt in order to try and cope. In addition, Ofwat says that “alarmingly”, 75% of younger people (18–34-year-olds) report that they are struggling to pay household bills ‘sometimes’ or more often.
Today’s report comes one year after the first joint Ofwat and the Consumer Council for Water (CCW) Customer Spotlight survey was conducted and reveals that, since then, the number of customers who have struggled to pay their household bills has more than doubled, from 12% to 25%.
Since Ofwat’s Cost of Living – Wave 1 report (May 2022) there has been an increase of a third in customers saying that they are currently struggling to pay their water bill, up from 15% to 20%.
Although the proportion of respondents receiving financial help from water companies has increased from 6% to 9%, there has also been a drop from 31% to 28% in the proportion aware that financial support is available from water companies. The report also reveals:
- 49% of respondents to the current survey said they would be ‘concerned’ if there was a £25 increase in household costs
- 40% of bill payers who have struggled to pay bills ‘all of the time’ reported feeling depressed, compared to 6% of people who ‘never’ struggled to pay their bills.
In the regulator’s view “customers’ financial struggles will likely continue, especially as the holiday season draws ever nearer and given that food, energy, housing and other costs are expected to remain high.”
Ofwat is reiterating its call to water companies to do everything they can to help customers struggling to pay their water bill.
Many customers struggling with utility bills - financial strain is persisting and, for many, worsening
Dr Claire Forbes, Senior Director of Corporate Communications at Ofwat, said:
"We know from previous research that many customers are struggling with utility bills. As today’s report underlines, this financial strain is persisting and, for many, worsening. As winter approaches, water companies must ensure they are supporting their customers and informing them of the help available. We will continue to listen to customers' concerns, monitor how well water companies are responding and take further action where necessary."
Ofwat, together with the Consumer Council for Water (CCW), have recently published a joint letter to water and wastewater companies from Ofwat Chief Executive David Black and Emma Clancy, Chief Executive of CCW, which asks them to increase financial support for customers.
“We expect water companies to be taking urgent action to support those struggling to pay their bills and will report on their responses in early 2023”, Ofwat said.
Earlier this year Ofwat published its ‘Paying Fair’ guidelines for water companies to support households pay their bill, access help and repay debts. Following on from those, the regulator is also asking water companies to provide Ofwat with customer debt information.
Ofwat is also advancing with a new customer-focused licence condition to transform water companies’ performance for customers which will require that companies deliver high standards of customer service and support for the full diversity of customer needs.
The research for the Wave 2 report, which was carried out between 4 and 13 October 2022, involved:
- A survey of 2,328 water bill payers in England and Wales. The sample includes 1,923 respondents in England and 405 water bill payers in Wales. The data was weighted to be nationally representative.
- A booster sample of 335 water bill payers from ethnic minority communities in England and Wales.
CCW Chief warns "this winter will be unbearable for many households"
Emma Clancy, Chief Executive of the Consumer Council for Water (CCW), commented:
“This winter will be unbearable for many households, which is why we’ve joined Ofwat in calling on water companies to go the extra mile to help their customers, as well as ensuring much more of the existing support reaches those that need it most.”
“The case for a new water affordability scheme to replace the current postcode lottery of financial support has never been more compelling. Without fair and consistent support across England and Wales, the next generation of customers could face the double whammy of unaffordable bills and an environment starved of vital investment.”
Click here to download the report Cost of Living: wave two - Water customers' experiences
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