Did you know that pre-pandemic, around 3 million households were struggling to pay their water bills? Water charges are set to rise by 1.7% in England and Wales from April, on top of a background of massive fuel price hikes, a rise in National Insurance and astronomical cost of living increases. Just like fuel poverty, the number of those in water poverty is set to upsurge as households struggle to pay their utility bills.
What is water poverty?
In Great Britain there is no government definition of water poverty, which is probably why most of us won’t have heard about it. The term covers those who simply cannot afford the cost of their water and sewerage services.
The water poor are often identified as those households spending over 3% or 5% of household disposable income on water services.
Who are the water poor?
If you don’t have the money to pay your water bill, it’s likely you are not in the position to pay other bills too. Those living in water poverty may have a range of debts and affordability concerns, and could be living in fuel poverty also. The water poor are most likely to come from low income households in the social rented sector.
The 2021 Quantitative analysis of water poverty in England and Wales report by Water UK found that from 2019-2020, 6.3% of English households spent more than 5% of their household disposable income (after housing costs) on their water bill, with 8.7% in Wales. While 17.4% of English households spent more than 3%, with Welsh households topping a huge 27.2%.
Research by Citizens Advice Scotland and the Fraser of Allander Institute estimated that, in 2015/16, 12% of Scottish households spent more than 3% of their net income on water and sewerage charges. The follow-up Affordability of water and sewerage charges, 2020/21 – 2027/28 had estimated that this number will drop to somewhere in the region of 10%. However, these estimates were pre-pandemic and pre-energy crisis, so are likely to be unreliable.
How are water bills calculated?
In England and Wales, the average water bill for the 2022/23 financial year is set to be £419 a year, equivalent to £1.15 per day. The water companies charge in two different ways:
- Unmetered bills are calculated on a fixed charge and an additional charge decided upon by your home’s ‘rateable’ value. Your home’s rateable value is worked out based on how much your local authority deemed the rental value of your home to be in 1990.
- Metered bills are calculated by a fixed charge and an additional charge based upon the amount of water you actually use.
So, if you are on an unmetered supply, there is a chance you could be charged for more water than you use. Likewise, high use families may be getting charged less than they use.
In Scotland, household water and sewerage charges are billed and collected by individual local authorities for Scottish Water, together with Council Tax. This joint billing and collection system enables water and sewerage bills for domestic properties to be linked to the Council Tax banding system and many existing Council Tax discounts also apply to water and sewerage charges.
What causes water poverty?
Water poverty is a wide scale problem. Under British law, water companies are not allowed to switch off the water supply to domestic residences. This allows bills and debts to rack up as households continue to use services they cannot afford. To turn off water supplies would create a public health hazard, which is why services continue, even in the face of spiralling debt.
What are the effects of water poverty?
Water companies can take all the usual civil legal recovery actions including visits from bailiffs and County Court Judgements (CCJs). This leads to damage to the debtor’s credit rating, further stress, and additional costs.
Those who try to ration usage to lower bills could have issues associated with:
- Poor hygiene
- Lack of social inclusion
- Health risks.
Water poverty is a very serious issue, which can impact massively on your quality of life, health, and wellbeing. For many it can lead into a downward spiral of debt.
How can we stop water poverty?
The Consumer Council for Water (CCW) says only 1 in 4 customers are aware water companies have schemes that can reduce the water bills of low-income customers. All English and Welsh water companies offer reduced tariffs to low-income customers. Eligibility and the level of support varies from company to company but, in some cases, bills can be cut by as much as 90%.
In Scotland, households may be able to apply for Council Tax Reductions. As water bills are included within Council Tax bills, this results in a cut in water charges. Reductions can also be available for those on low incomes receiving benefits such as Housing Benefit, Tax Credits, Universal Credit, and Income Support, or if you pay council tax in Bands E-H.
The CCW’s Independent review of water affordability 2021 found that ‘5 out of 6 customers who cannot afford their water bill were not receiving the help they need, despite a significant rise in water company support schemes over the past decade. That’s because some of these schemes remained hampered by insufficient funding and large regional variations in eligibility criteria – creating a ‘postcode lottery’ of help.’
However, water companies, regulatory bodies and consumer groups are working towards measures to help end water poverty. 1 million households are now receiving help with their water bills, rising to at least 1.4 million by 2025.
Several recommendations have been made including:
- Creating a single social tariff that would ensure targeted financial support reaches those that need it most – ending the currently problematic postcode lottery of support.
- Using the 3% measure of water poverty across the board in official figures, meaning that a household will be deemed water poor if it spends more that 3% of disposable income on combined water and sewerage bills.
- Tracking the water poverty gap more thoroughly. Understanding the issue more fully will allow better support to be put in place.
- Breaking down the existing barriers to getting help. Ensuring households know there is support and how to access it.
What should you do if you can’t pay your water bill?
If you are falling into water poverty and need help paying your water bills there are several steps you can take.
- Talk to your Water Company and explain you are having trouble paying your bills.
- If you are on a metered supply, you can cut water wastage to help lower your bills.
- If you are on an unmetered supply, you can switch to a metered supply or appeal if you think your rateable value is too high.
- If you swap to a metered supply and your bills go up, you can ask to swap back to an unmetered supply within the first 12 months.
How can you cut water waste?
- Fix any dripping taps or plumbing leaks - a dripping tap can waste more than 60 litres of water per week if it isn’t rectified!
- As a rule, take a shower rather than a bath.
- Some showers can actually use more water than bathing (think super drenching power showers), so keep your shower routine short to save as much water as possible.
- If you do have a bath, just fill it up with the water you need.
- If showers, taps and toilet cisterns are coming to the end of their life, swap for water efficient models. If you are unsure, talk to your plumber, they will be happy to give their advice.
- When brushing your teeth, turn off taps in-between rinsing your toothbrush.
- Always turn taps off tightly so they do not drip.
- Try to use electrical appliances such as dishwashers and washing machines when full. While modern high-end washing machines will calculate the load and use water accordingly, most washing machines and nearly all dishwashers will use the same amount of water whether the machine is half empty or full.
- Switch to using an eco-mode if your appliances have one.
- When buying new appliances or water fittings, check to see if they carry the Unified Water Label – this will help you check both water and energy performance. Find out more at http://www.europeanwaterlabel.eu/
- Invest in rainwater butts to catch rainwater. This water can then be used to fill fishponds and water the garden – saving you money on your water bills. Check out our Top tips for saving water in the garden.
Water poverty links
If you want to find out more about water poverty or view some of the reports referenced in this blog, please visit:
Help paying for bills (England and Wales)
Can you get a Council Tax Reduction (Scotland)?
Quantitative analysis of water poverty in England and Wales
Affordability of water and sewerage charges, 2020/21 – 2027/28