Millions of water customers in England and Wales could see changes to their bills after the regulator Ofwat proposed £240 million in reductions because of poor performance by water companies.
Under the plans, Yorkshire Water customers could have an average of £27 taken off their annual bills, while Thames Water customers could see a £7 reduction.
But there’s a catch. Some water companies could actually charge customers more, and even those getting a reduction might still see their overall bills rise.
The proposals were announced by Ofwat on 14 October 2026 and are not yet final.
Which water companies could cut bills?
The changes follow a review of how water companies performed during 2025–26, including whether they met targets for leaks, customer service and other areas.
Yorkshire Water and Thames Water face the biggest penalties for missing their targets.
Here’s how the proposals could affect a typical customer’s annual bill from April 2027:
| Water company | Proposed annual change |
|---|---|
| Yorkshire Water | £27 lower |
| Thames Water | £7 lower |
| Northumbrian Water | £21 higher |
| Severn Trent Water | £8 higher |
These are estimated changes linked to company performance, not predictions of how much your entire water bill will rise or fall. The amount could be different for your household.
The figures were reported by The Guardian using Ofwat’s estimates.
Other companies facing proposed penalties include Welsh Water, South West Water and United Utilities.
Not every water company is listed above, and the final changes will depend on Ofwat’s decisions in December.
Does this mean your water bill will actually go down?
Not necessarily.
The proposed penalties would reduce how much certain water companies are allowed to collect from their customers. But water bills are affected by other costs, including investment in pipes, sewage treatment and other improvements.
So even if your company faces a penalty, your next bill could still be higher than the one you’re paying now.
For example, if you’re a Yorkshire Water customer, the proposed £27 reduction means your bill could be £27 lower than it would otherwise have been.
It doesn’t guarantee you’ll pay £27 less than this year.
And it’s not a £27 refund you can apply for.
Ofwat is proposing a £240 million net reduction in water bills by 2030. Of that, £107 million is expected to be passed on through customer bills in 2027–28.
The adjustments are handled through water companies’ charges rather than individual cash payments.
Why could some customers pay more?
It comes down to how their water company performed.
Ofwat sets targets for water companies. These cover things such as reducing leaks, preventing sewer flooding and improving the service customers receive.
Companies that fall short can face financial penalties, which reduce the amount they can recover through bills.
Those that beat their targets can receive financial rewards.
That’s why Northumbrian Water and Severn Trent Water could be allowed to collect more from customers, while Yorkshire Water and Thames Water face reductions.
It’s a way of holding water companies responsible for the service they provide, particularly as most households cannot choose a different water supplier.
When will the changes happen?
Nothing is changing immediately because of this announcement.
The consultation closes at 5pm on 5 November 2026, with Ofwat expecting to make its final decisions by 15 December 2026.
Any resulting bill adjustments will take effect from 1 April 2027.
The final amount will depend on your water company, the services it provides and other charges included in your bill.
What can you do to reduce your water bill now?
You don’t need to wait until April 2027 to see whether you could save money.
There are a few things worth checking.
1. Check whether you qualify for a cheaper water tariff.
Every water company offers a social tariff for eligible customers who are struggling to afford their bills.
The discount and qualifying rules vary depending on your supplier, so it’s worth asking what support is available.
2. Find out whether a water meter could save you money.
If you have a smaller household or use less water than average, paying for what you actually use could work out cheaper.
The Consumer Council for Water’s free water meter calculator lets you check potential savings using 2026–27 charges before making a decision.
3. Ask about WaterSure.
Some households with a water meter, certain benefits and higher essential water needs may qualify for help through WaterSure, which can cap their bill.
You can find more details on Ofwat’s customer assistance page.
If you’re struggling to keep up with payments, contact your water company rather than waiting for the next bill. You can also read our guide on what to do if you can’t pay your bills.
We’ve also put together a detailed guide on how to save money on your water bill, covering cheaper tariffs, water meters, possible rebates and other help.
We’ve included our own Yorkshire Water bills and the results of checking whether a water meter would save our household money.
How to check which water company supplies your home
Your latest water bill should show which company is responsible for your water services.
If you’re unsure, you can enter your postcode into Water UK’s free supplier checker.
Some households have one company supplying their drinking water and another dealing with wastewater, so you may need to check both.
The proposed adjustments apply to water companies regulated by Ofwat in England and Wales, not water services in Scotland or Northern Ireland.
You don’t need to apply for a refund or contact your water company about these proposed reductions. Any confirmed adjustments will be included in future bills.
