Cost of living pressures and the risk of rising levels of debt are a key area of focus for us given the harm it can cause customers. So we have carried out a review of how water companies in England and Wales say they are helping their customers pay bills, get help and repay debts.
In our review, we asked companies to set out the extent to which they comply with our Paying Fair Guidelines, which we issued in May 2022, and the further actions they are undertaking. This builds on the work of companies to update their core customer information to comply with our guidelines, which CCW reviewed in late 2022.
|Our Paying fair principles|
|1. Help make it easy for all customers to pay their water bill|
|2. Make sure customers who are eligible for help receive it when it is needed|
|3. Treat customers that have their accounts managed by agents as customers of the company|
|4. Be proactive in contacting customers in debt|
|5. Be clear, courteous and non-threatening to customers in debt|
|6. Agree payments that are right for each customer in debt|
|7. Treat customers facing debt recovery action with care|
Our request was high level, and in practice the level of detail in companies’ responses varied enormously, so to increase the effectiveness of our review we requested further information from seven companies. Where companies comply with our minimum expectations, we did not require them to provide evidence of this, but many chose to do so.
We have published all companies’ submissions. We think that the submissions of Dŵr Cymru, Hafren Dyfrdwy, Severn Trent Water, United Utilities and Yorkshire Water are exemplary. Companies can save time and effort by learning from the successes of others: we strongly encourage all companies to look at and learn from these examples – and the examples of other companies, some of which we cite in our assessment below – so that customers can be better supported.
The 17 companies reported on around 200 activities in total they are undertaking with the aim to achieve or go beyond compliance with the minimum expectations in our paying fair guidelines. Taking this into account, every company has now confirmed to us that they comply with each of our paying fair principles (with the exception of one company with respect to principle 2; and three companies explaining that principle 3 does not apply because their customers’ accounts were not managed by agents.)
We are pleased with the positive commitments that the companies have made, and the clear accountability that this brings. This is welcome and a key next step for us and CCW will be to follow up on commitments, focusing on weaker companies and highlighting where we think they need to go further.
This is in the context where billing and charging are by far the biggest cause of complaints for almost all companies and to CCW – with over one third of billing complaints to CCW disputing liability for bills according to CCW’s Household customer complaints report. This is a particular concern at a time when many customers are struggling to pay their household bills, and underlines the importance of the industry improving in the support they give customers in this area.
Some of the best evidence as to whether customers are being supported is from customers themselves, which comes through our C-MeX surveys and other sources. We will work with CCW to use these companies’ submissions and commitments to hold companies to account where we find poor customer experience in this area.
Below you can click to find out more about:
We published our ‘Paying fair guidelines’ in May 2022, setting out our principles and minimum service expectations for companies in supporting household customers in England and Wales pay their bill, access help and repay debts. Alongside the final guidelines we also published ‘Decisions on ‘Paying fair guidelines’ and summary of responses to consultation’.
- updated their policy and procedures to take account of our guidelines;
- updated their core customer information – including debt collection procedures and other matters such as payment methods covered by the guidelines
- consulted with CCW on revising their customer information (as required by their licence)
In late 2022 CCW reviewed the debt codes of practice submitted by each company and fed back their assessments of this information for companies to act on.
Having acted on CCW’s feedback, each company sent us summary information on:
- the extent to which they comply with our guidelines;
- where they depart from them systematically, the justification for doing so and the evidence; and
- the areas where they are planning to change policies, procedures and systems and their implementation timings.
- the compliance information each company sent to us
- information that each company provided us on their efforts to ease cost of living pressures for their household customers
We asked seven companies to submit additional information, including completion of a template, because we were not able to gain sufficient assurance on the basis of those companies’ first submissions.
We have reviewed all the information that companies sent to us. Below we report on our assessment of compliance with respect to each of the seven paying fair principles, considering the extent to which the sector is complying with each principle, including steps being taken to further improve. We also highlight examples of water company practice and areas where companies have committed to taking further action.
We are reviewing the submissions from new appointees (also known as NAVs) separately (as part of our review of their annual performance report submissions) and do not report on them here.
We used water companies’ submissions to assess their compliance with the Paying Fair principles.
Click one of the principles to find out what we found – or scroll down to read our findings.
All companies confirmed to us that they comply with principle 1 of our paying fair guidelines to “Help make it easy for all customers to pay their water bill.” Most companies are taking further actions to improve compliance with our minimum expectations for this principle and/or making further improvements to the services that customers receive, with over 70 actions reported against our expectations for this principle.
Several companies highlighted efforts to make it easier for customers with irregular incomes to pay their bill. For example, United Utilities have a ‘Pay as you go’ scheme allowing customers to spread payments over three month periods, paying different amounts whenever they wish. Affinity Water plan to offer a similar scheme – and Yorkshire Water are also considering a trial. Portsmouth Water highlighted that its customers can use pay point facilities around the Portsmouth Water area, with cheques posted into the office also being accepted: should a customer be unable to visit a pay point or pay via the other methods communicated on its bills, arrangements can be made for a visit to the customer to collect payments.
Some water companies highlighted how customer feedback is leading to improvements to services. This includes Northumbrian Water who are working with local CCW advocates on how they can show customers that their views influence the company’s processes and are developing a new website area as a first stage in the first half of 2023.
Severn Trent Water and Hafren Dyfrdwy have invested in speech analytics to help provide better insight and satisfaction to customers on many different communication topics, including debt recovery. Both companies also receive verbatim scores and comments from customers after they’ve been in touch with them to identify areas of improvement. This is offered to all customers including vulnerable customers, enabling the companies to intervene quickly when customers have received a poor experience. Severn Trent Water and Hafren Dyfrdwy also use a customer tracker survey to hear what their customers think of them, their services and their communications.
Further actions include a growing number of companies committing to displaying support messaging on customer billing envelopes – building on learning from Dŵr Cymru’s trial of envelope messaging as part of CCW’s affordability pilots. Several companies are already adopting this approach to make support information more visible to customers, including South East Water who use envelopes to target key messages to its customers including customers who are struggling to pay. It reviews the messages with its print provider on a quarterly basis.
Some water companies are using credit reference information to understand customer circumstances and a small number of companies note plans to make more use of such data in future.
Other companies, such as South West Water report taking an alternative approach and have built an innovative data model, combining internal and external data sources, which allows it to proactively identify financially vulnerable customers. This model, accompanied by a suite of early warning indicators (e.g. change to payment method) allows them to identify customers who are or may be at risk of becoming financially vulnerable so they can make proactive, early intervention to prevent these customers falling into debt. The company’s ambition is to eradicate Water Poverty by 2025 and it reports being on track to achieve this. Data is at the forefront of this with South West Water partnering with a data and technology company to build a granular view of a customers circumstances and characteristics, before further combining this data with Department for Work and Pensions, Office of National Statistics information and actual bill and consumption data. This is used to identify, proactively engage with, and auto enrol customers onto support tariffs. These customers are often the struggling silent and hardest to reach and this proactive approach helps to bring them out of water poverty. Over 8,000 customers were auto enrolled onto support tariffs in 2022-23 since this innovative method was launched in July 2022.
Bristol Water’s aim over the last five years is to have zero percent of customers in water poverty, which it reports having achieved this year. This has been achieved by working with a data and technology company to build a picture of customers circumstances and characteristics alongside existing customer data. This is then used to identify and proactively engage with customers and help them onto the best support schemes to suit their needs.
All companies have confirmed to us that they comply with principle 2 of our paying fair guidelines to “Make sure customers who are eligible for help receive it when it is needed” apart from one company that reported a number of actions to improve compliance with our minimum expectations over this and next financial year. All but two companies are taking further actions, with about fifty actions reported in total.
Most companies reported developing relationships with other organisations and the communities they work in to reach customers in vulnerable circumstances, those in debt or at risk of falling into debt. These vary in depth and scale. For example, Affinity Water highlight signposting customers to holistic debt advice during conversations and have a partnership with National Debtline which includes a webpage dedicated to help and support. Severn Trent Water and Hafren Dyfrdwy’s strategy includes working closely with local authorities. Severn Trent Water highlight the example of its Care Leavers programme, taking young adults who are leaving the care system and passporting them straight onto its affordability schemes to help their transition into society.
Anglian Water have recruited a Customer Champion Group, representative of all customers across its region. The group is intended to represent the wider customer base and provide feedback on customer campaigns and other customer facing materials/outputs to ensure that the company communication is accessible and non-threatening. Anglian Water have rolled out an advice and referrals tool to its front-line agents. This intelligent advice tool helps identify statutory and charity sector services for customers who need third party support. It will aid conversations between front line agents and customers and support disclosures of vulnerability, for them to be dealt with in an appropriate manner.
United Utilities holds an annual affordability summit with customers, charities and other stakeholders that can develop links and help reach household customers. Dŵr Cymru are also engaging with local communities through face to face ‘help with bills’ events via pop up debt surgeries and inviting arrears customers to meet with them and look for a resolution to problems via the range of support options available.
South East Water highlights how it improved outcomes by connecting customers with other relevant forms of support that included allocating government hardship funding to customers. The company partnered with Kent County Council to identify customers who were vulnerable and/or struggling to pay and allocated over £400,000 of government hardship funding to support its customers.
South Staffs Water’s Code of Practice for Household Customers commits to treating any debt charity or agency acting on behalf of a customer as a customer of the company too.
A further example of good practice was highlighted jointly by Wessex Water and Bristol Water who report funding 37 debt advice agencies that refer customers directly on to their affordability schemes having carried out a holistic review of customer finances, maximised their income and assessed their ability to pay. These companies also work with around 300 other consumer advice/support charities and organisations to raise awareness and increase uptake of the support for customers in vulnerable circumstances.
United Utilities has a dedicated affordability team to undertake affordability assessments with customers. This includes the option to use open banking to simplify the process for the customer and improve the accuracy of the data provided so customers who are eligible for help receive it as soon as possible. Harnessing the potential of open banking provides United Utilities with the capability to assess eligibility immediately, through an initial enquiry, rather than through a series of discreet interactions with the customer. This transforms a process which used to require physical forms of verification and over a week of administration to one that can be completed within 15 minutes, there and then in an efficient way. Customers in need of financial support value the simplicity and immediacy this brings. Of those customers who are offered verification through Open Banking, over 40% successfully complete the process.
Another common area where we found good practice examples was in supporting customers who are experiencing bereavement. This includes Wessex Water and Bristol Water who have jointly added promises to their Vulnerability Strategy and are introducing a new bespoke website page, offering Live Chat, and signposting to a death notification service. Following the publication of the paying fair guidelines, the companies introduced an online bereavement form, further reviewed their web pages and developed a more formal internal written overview/plan.
SES Water also offer a dedicated support line for bereaved customers with specially trained advisors. All the supporting materials have recently been rewritten and SES Water work with a death notification service to offer a streamlined process for customers.
Further company actions across the sector to support customers who are experiencing bereavement include commitments to review policies, undertake customer representative training and introduce new communication channels for bereaved customers to use to get in touch.
Almost all companies confirmed to us that they comply with principle 3 of our paying fair guidelines to “Treat customers that have their accounts managed by agents as customers of the company”, except for three companies who told us that this principle was not applicable. A small number of companies reported taking further actions in relation to our expectations, including revising customer bills to show both the water charges made and how to access financial support, as well as advice for saving water.
Northumbrian Water write to all customers billed by local authorities annually to highlight their rights and provide information on priority services, support schemes and Guaranteed Standards of Service. Northumbrian Water work closely with local authorities and housing associations in its region to help them make tenants aware of the support that the company offers. These organisations assess eligibility on behalf of the company to passport customers onto support schemes.
Yorkshire Water highlighted how it had embedded practices through Community Engagement activity and robust annual billing processes with relevant housing associations to provide customers with information about water charges and the financial support available. All social tariffs and financial support are available to all customers – with most housing associations empowered to administer social tariffs on Yorkshire Water’s behalf to ensure customers receive the support they are eligible for.
All companies confirmed to us in their self-assessment that they comply with principle 4 of our paying fair guidelines to “Be proactive in contacting customers in debt.” Twelve water companies reported taking over 25 further actions in relation to our underlying expectations for this principle.
Wessex Water highlight its use of customer testimonies and in particular the story of Eileen – one of the many customers it has helped when they were struggling to pay their water bills and who is now water debt free. Eileen offered to share her experience to encourage other customers like her to reach out to the company. Eileen’s story is on Wessex Water’s customer website and PartnerHub websites and is a case study in their Vulnerability Strategy, Every Customer Matters.
Severn Trent Water and Hafren Dyfrdwy have also developed communications with customers in debt based on debt personas that have been built through the end-to-end debt journey. This allows for tailored approaches to intervention to be taken dependent on customer history and any vulnerabilities. Some other companies note plans for developing customer testimonies during this year.
Anglian Water actively seek to promote services to customers who may be struggling to pay by using triggers and scorecards that identify defaulting customers and target assistance. Anglian Water use an affordability scorecard in its telephony platform to auto-route customers from its Billing Call Centre to its Extra Care teams who promote Extra Care assessments and personalised support to meet customer needs.
Southern Water have established close links with Job Centres across its region. It has developed a system where agents attend job centres monthly and the work coaches will book appointments for clients to discuss their water bills and bring any paperwork along. It has been a popular initiative that the Job Centres have welcomed.
Further actions by companies include new channels of contact to enable customers to seek information and support earlier and a greater emphasis on developing good connections with debt advice providers to facilitate the promotion of and “warm referrals” to free debt advice services so customers access advice and support at the right time.
All companies confirmed to us that they comply with our principle to “Be clear, courteous and non-threatening to customers in debt.” Nonetheless, many companies reported further actions with at least twenty actions against our underlying expectations. Actions include customer representative training, as well as efforts to make communications with customers clearer, especially for customers who may struggle with literacy and numeracy and/or language barriers, with a focus on bill design and financial support messages.
South East Water recently re-designed its bill following a full consultation with customers and CCW. All bills and notices are written in plain English and plain numbers. The company is also working with Scope to ensure that its communications and campaigns are inclusive and accessible to all customers.
Thames Water has tailored the language of its communications through partnering with Plain Numbers who have trained its customer communications team in best practice of presenting numerical data in a simple and accessible way. High risk documents can be reviewed by the Plain Numbers experts and receive ‘accreditation’ – and Thames Water achieved accredited status for two of its letters that were updated with Paying Fair Guidance in mind.
Other companies such as Anglian Water are also working towards gaining the Plain Number accreditation to ensure its literature, forms, and communications are clear and easy to understand.
Wessex Water and Bristol Water have worked with organisations such as the Money Advice Trust, Quidsin! The Social publishing magazine and Wiltshire MIND to review its bills and other literature, improving calls to action and language. In 2021 the companies commissioned research with Scope to review its bills to improve accessibility and customer experience initially with Scope’s experts and then with their customer panel. Their recommendations have been implemented by the companies.
Dŵr Cymru has focused on improving communication where there are language barriers by offering a “Language Line” for customers who do not speak Welsh or English as a first language and its website can be translated into 53 languages. Yorkshire Water also highlighted how bills are available in different formats, such as verbally or in Braille. Translation services are available on contact with customers, and online provisions for British Sign Language and ReciteMe are available.
All companies confirmed compliance with Principle 6 of our guidelines to “Agree payments that are right for each customer in debt.” Several companies are proactively using the Standard Financial Statement (SFS) to assess the affordability of customer payment arrangements. This includes Wessex Water and Bristol Water who were involved in the national development of the SFS and adopted it when it replaced the common financial statement. These companies ask their advice partners to use the SFS when determining a customer’s ability to pay and share it with the companies when referring onto the Assist social tariff. The companies query if a customer is under or over the recommended trigger figures if required and work with the advice agency to identify the most appropriate level of discount (up to 90%) to suit the customer’s individual financial circumstances.
Northumbrian Water use any SFS provided by customers to assess affordability of payment arrangements. When talking directly to customers it will take a proportionate approach asking for core elements within the SFS to assess payment affordability at early stage of collections but also use a SFS approach where customers are further into arrears.
South Staffs Water has colleagues go through customers income and expenditure to ensure the most appropriate plan is agreed with the customer and use the SFS when applying for a social tariff or charitable trust scheme.
Other companies note plans to consider use of the SFS as an objective and standardised measure to assess the customer’s financial circumstances.
Some companies report taking an alternative approach through undertaking their own income and expenditure assessments. For instance, Thames Water established a consistent means of considering customers’ ability to pay through its use of its own bespoke tool provided by a debt advice organisation. This income and expenditure tool, for customers who are struggling to pay, allows Thames Water to provide consistent and fair outcomes for customers. Thames are completing over 5,000 reviews per month so that payment plans are set up sustainably and with the right support.
Southern Water highlighted how it was seeking to refer customers to debt advice at an earlier stage. Where a customer is struggling and needs time to consider options, Southern Water will place the account on hold for 30 days and signpost Step Change or Citizens Advice. After the initial 30 days, the company will re-contact the customer – at that stage, depending on circumstances, the hold will be extended or an underpaying payment plan will be put in place.
Yorkshire Water highlighted it pauses all recovery activity on becoming aware a customer is seeking debt advice. During customer contact, where applicable, customers will be signposted to external debt support if required; “warm” transferred with customer agreement; and/or Breathing Space promoted. In addition, in 2022 additional financial support has been implemented which provides customers referred under Breathing Space 60 days charges paid for by Yorkshire Water.
All companies confirmed compliance with Principle 7 to “Treat customers facing debt recovery action with care.” Most companies are not selling on customer debt and report using accredited debt collection agents (DCA). All companies that use DCAs confirm that they carry out regular checks that agents are treating customers sensitively, with some companies planning to increase the frequency and robustness of audits further.
Companies also confirmed compliance with our expectations of ensuring the needs of priority services customers are met.
- Portsmouth Water allows customers who have been passed on to DCAs to continue to communicate exclusively with Portsmouth Water if that is how they feel most comfortable.
- SES Water uses a debt collection agent that is authorised to accept payments from as little as £1. SES Water meets with the DCA once a month to review customer journeys and no priority service register (PSR) customers are referred to the DCA.
- Severn Trent Water and Hafren Dyfrdwy do not pass anyone who is on the PSR onto debt collection agencies – they continue to support the customer and case manage where appropriate.
- Likewise, Northumbrian Water and South West Water do not pass customers who are on the PSR onto debt collection agencies. Both also carry out audits of their agents to ensure that they are following the agreed collections processes and supporting customers in line with their expectations and applicable regulatory guidance. Northumbrian Water ask debt agents working on its behalf to pass any customers they identify as vulnerable back to them.
Companies also confirmed compliance with our expectation of telling courts promptly when customers clear their debt, although one company noted it was awaiting a solution for partial payment notification.
In their submissions, companies set out around 200 activities in total they are undertaking with the aim to achieve or go beyond compliance with the minimum expectations in our paying fair guidelines. This is welcome and a key next step for us and CCW will be to follow up on commitments, focusing on weaker companies. Drawing on these, and taking wider insights into account, we set out here particular areas where some companies are taking steps to improve, some companies may need to do more, and areas which we may investigate in greater depth in future.
This is in the context where billing and charging are by far the biggest cause of complaints for almost all companies and to CCW – with over one third of billing complaints to CCW disputing liability for bills according to CCW’s Household customer complaints report. We continue to see a number of individual complaints about various companies either:
- Threatening or taking overly aggressive debt recovery action against customers for relatively small amounts of debt or that previously had a good payment history.
- Seeking final payment from customers who have no record of being contacted – with no bill or reminders being sent by their company and only finding out about the debt when viewing a default on their credit file or being approached by a debt collection agent acting on behalf of the company.
All debt recovery activities and communications should be targeted and proportionate, being underpinned by robust systems and processes. Recent Money and Mental Health Policy Institute findings highlight the consequences of bad practice in an unspecified sector where a customer who had missed a payment received seven contacts in seven hours from a single debt collection agency. Given reports of harm that some debt recovery businesses have caused in other sectors, it is important that water companies ensure their own agents receive high levels of scrutiny. We expect companies to act promptly on any complaints by customers about any poor treatment from third parties acting on behalf of companies.
We encourage all companies to strengthen partnerships with debt advice providers to facilitate ‘warm’ referrals of customers in need of further help and to make it easy for advisers to actively manage and attempt to attain support on behalf of customers. While many companies highlight existing good relationships, we understand that some debt advice organisations experience difficulty engaging directly with water companies on behalf of their clients.
Companies are acting to improve policies, systems and approaches in supporting customers that have suffered a bereavement. Failure to be responsive when a relative is reporting a customer’s death can result in additional stress at a difficult time. Further company actions across the sector to support customers experiencing bereavement include commitments to undertake customer representative training and introduce new communication channels to facilitate closure, freezing or transfer of an account.
Several companies confirmed use of the Standard Financial Statement (SFS). Some companies plan to consider adopting the SFS in future or highlighted taking an alternative approach at this time. We remind companies taking an alternative approach that we expect them to publish their methodology and to share customer insights and best practice. We also expect companies to be open to accepting SFS assessments from customers/intermediaries to help increase consistency and minimise the burden of customers having to provide different information across sectors. This is an area that CCW is following up on as part of its in-depth programme of company debt audits.
Many companies use a variety of sources of intelligence and insight – and at points engage with customers to develop their services. But the level of customer participation – particularly from customers with diverse needs – in accessible and inclusive service design and improvement is an area we would like to see more progress. Alongside this assessment, we are setting out our expectations and consulting on new draft vulnerability guidance for water companies in supporting customers who need extra help.
Water companies’ plans to help customers with cost of living pressures show that they are increasing financial support for their customers, with record numbers benefiting from discounted water bills. However, levels of customer awareness of the financial support available remains low, and both we and CCW would like to see further action. This includes both raising awareness and reaching customers eligible to receive support, which continues to be areas for improvement. It is even more important with a rising cost of living that water companies are maximising the chances of customers engaging and receiving the support they need at an early stage.
The 17 water companies are undertaking around 200 activities in total with the aim to achieve or go beyond compliance with the minimum expectations in our paying fair guidelines. A key next step for us and CCW will be to follow up on commitments, focusing on weaker companies and highlighting where we think these companies need to go further.
Companies can save time and effort by learning from the successes of others, and customers will be better supported: we strongly encourage all companies to look at and learn by reading submissions and the examples we have set out in our assessment, and from companies’ submissions. In particular, we consider the submissions of Dŵr Cymru, Hafren Dyfrdwy, Severn Trent Water, United Utilities and Yorkshire Water to be exemplary.
Companies are to consider our findings – and whether there are further improvements they need to make to their approach, including in light of our recently published shared regulatory expectations on the cost of living. A next step for regulators will be to consider shared expectations in relation to debt collection across different sectors.
In autumn 2023 companies will be submitting their business plans for the 2025-2030 period, including their plans on supporting customers struggling to pay. We will assess and grade these plans for supporting customers as part of our PR24 price review. Find out more about the 2024 price review
We monitor companies, using customer insights (such as the C-MeX surveys and bespoke research), company data submissions (such as quarterly submissions on customer debt) and other sources. This allows us to prioritise areas for deep dives and further investigation. We will work with CCW to use these companies’ Paying Fair submissions and commitments to hold companies to account where we find poor customer experience in this area. In future, we have proposed that our Paying fair guidelines will become ‘designated guidance’ under our new customer-focused licence condition. Find out more about Ofwat’s work to develop a customer-focused licence condition.
You can read all the information that water companies sent us here. We are sharing this information in full to provide transparency to customers and customer representatives. It also provides a valuable resource for all companies to learn from each other. Companies can save time and effort by learning from the successes of others. In addition, we have highlighted examples of good practice across all companies here: Download examples of company practice
*Bristol Water became part of South West Water on 1 February 2023: SSW_Final_Decision_Document.pdf (ofwat.gov.uk)