Water costs

by Meg Huby and Jonathan Bradshaw

Almost a quarter of households in England and Wales suffered from water poverty in 2009/10 and if water charges continue to rise more quickly than inflation, the extent of water poverty could more than double by 2033. This is causing problems both for low-income families, who find that water costs are putting ever more pressure on household finances, and for the water companies, who face increasing losses of revenue through non-payment.

Since water privatisation in 1989, water prices have been increasing faster than both inflation and average earnings. As the graph below shows water and related charges have risen faster than overall consumer prices (though less than fuel and lighting). This has posed particular problems for families on benefits as benefit increases have been pegged to the Consumer Prices Index.

Movement in water compared to CPI and other costs