New research by Ofwat shows that more customers are struggling with household bills and that two-thirds expect their situation to worsen in the coming year. In order to try and cope, many are borrowing money from friends and family, taking out loans or getting deeper into debt. Alarmingly, 75% of younger people (18–34-year-olds) report that they are struggling to pay household bills ‘sometimes’ or more often.
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.
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%. 49% of respondents to this 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.
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, therefore, reiterating its call to water companies to do everything they can to help customers struggling to pay their water bill.
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 CCW, has recently published a joint letter to water and wastewater companies from David Black, Chief Executive of Ofwat, 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.
Earlier this year we published our ‘Paying Fair’ guidelines for water companies to support households pay their bill, access help and repay debts. Following on from those, we are also asking water companies to provide us with customer debt information. We want to ensure that water companies are utilising this information effectively in order to target communication and support to the most vulnerable customers.
We are also advancing with our new customer-focused licence condition to transform water companies’ performance for customers. Part of Ofwat’s ‘Time to Act, Together’ strategy, this new licence condition will require that companies deliver high standards of customer service and support for the full diversity of customer needs.
Notes to editors
Cost of Living: Wave 2 is the second in a series of reports looking at customers’ experiences with household bills, especially water bills, and their views on value for money.
Research report available here: Cost of Living: Wave 2 – water companies’ experiences
Our first report, Cost of Living, water customers’ experiences, is available here: Cost of Living – Water customers’ experiences.
Research for the Wave 2 report was carried out by Savanta between 4 and 13 October 2022. Savanta is a member of the British Polling Council and abides by its rules.
The research 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.
The data used in this report is mostly taken from the main sample of bill payers in England and Wales (base: 2,328). However, data that looks at differences by ethnicity includes the ethnic minority booster sample together with the ethnic minority respondents from the main survey, making a total base of 572 respondents.