- Increase to water company reimbursements put more money back into customers’ pockets when their services are hit
- Triggers for compensation to be expanded to include company failure to conduct meter readings and installations
- One of Environment Secretary’s first promises in office delivered as government rolls out plan to reform the water sector
Water companies will increase compensation payments to customers up to tenfold from today (2 July), ensuring that the public are more fairly reimbursed for supply issues and low standards of service.
Customers will automatically receive more money for issues such as continued low water pressure and cancelled appointments.
A key step in the government’s mission to reform the water sector, the move marks the first uplift in compensation rates in 25 years, with the government recognising the urgent need to bring payments in line with inflation and properly compensate households for poor service.
Severe issues such as flooding will see customer compensation double from £1,000 to up to £2,000, while households suffering consistent low water pressure will be automatically eligible to receive up to £250 – a huge uplift from the previous compensation rate of just £25.
From today, no action will be needed from eligible customers as payments will automatically be credited back to their accounts.
Environment Secretary Steve Reed said
Too many water companies are letting down their customers – with leaking pipes, poor water supply and low water pressure.
The Government is holding water companies to account by making them put money back into people’s pockets when they fail their customers.
The government is also working with water companies to expand the list of circumstances that will trigger compensation payments. Compensation for when customers are asked to boil their water due to contaminated supply will come into force later this year.
The standards, outlined in the Guaranteed Standards Scheme, set out a baseline for customer service in the water sector. They include providing timely restoration of water supply following an interruption, responding to written complaints and managing the risk of sewer flooding.
This comes as part of the government’s action to cut sewage spills and attract investment in the sector, including
- Strengthening regulation to ensure polluting water bosses who cover up their crimes now face two-year prison sentences.
- Banning unfair bonuses for bosses of six polluting water companies.
- Launching a record 81 criminal investigations into sewage pollution.
- Securing £104bn in private sector investment to upgrade crumbling sewage pipes and cut sewage by nearly half by 2030.
- Launching the Independent Water Commission led by Sir John Cunliffe to modernise the water industry and work with companies and their investors to make the industry one of growth and opportunity.
Mike Keil, Chief Executive of the Consumer Council for Water (CCW), said
Customers expect to be treated fairly when their water company lets them down, so we’re delighted the Government has moved at pace to strengthen service standards.”
This should give people peace of mind they now have far stronger protection from a much broader range of water company service failures – from the slow installation of water meters to the mishandling of debt recovery. As well as bolstering payments for thousands of customers, these changes mark an important step towards restoring trust in the water sector which is at an all-time low.
David Black, Chief Executive of Ofwat said
We welcome these improvements to guaranteed standards and payments for customers.
When customers suffer from problems like low pressure, disruptions to supply or sewer flooding they can experience major stress and inconvenience, and payment amounts must recognise the disruption to their lives when standards are not met.
These new changes are another way to make sure customers are protected when companies get it wrong.
Annex A
Summary of updates to payment levels for existing standards
| Existing Standards | Coming into force date | Old GSS payment | New GSS payments | Uplift | |||
|---|---|---|---|---|---|---|---|
| Household | Non-Household | Household | Non-Household | Household | Non-Household | ||
| Appointments not made properly | 2 July | £20 | £40 | 100% | |||
| Appointments not kept | Uprated payments to existing standard – 2 July Amended standard 1 Oct |
£20 | £50 | 150% | |||
| Account queries not actioned on time | Uprated payments to existing standard – 2 July Amended standard 1 Oct |
£20 | £40 | 100% | |||
| Requests to change payment arrangements not actioned on time | Uprated payments to existing standard – 2 July Amended standard 1 Oct |
£20 | £40 | 100% | |||
| Complaints not actioned on time | Uprated payments to existing standard – 2 July Amended standard 1 Oct |
£20 | £40 | 100% | |||
| Less than 48 hours’ notice of planned supply interruption of more than 4 hours | 2 July | £20 | £50 | £50 | £100 | 150% | 100% |
| Supply not restored on time | 2 July | £20, and £10 for each subsequent 24 hours | £50, and £25 for each subsequent 24 hours | £50, and £50 for each subsequent 12 hours | £100, and £100 for each subsequent 12 hours | 150% for initial payment, 400% for subsequent payment and halved subsequent payment period |
100% (for both initial and subsequent payment) and halved subsequent payment period |
| Low pressure | 2 July | £25 (once per financial year) |
£50, up to five payments per financial year – equivalent to just over the average water bill. Automatic £250pa for customers with ongoing low pressure |
100% and increased annual maximum by 10x | |||
| Internal flooding from sewers | 2 July | Payment equal to annual sewerage charges (Minimum payment of £150. Maximum of £1000) |
Payment equal to annual sewerage charges, at minimum of £300 and maximum of £2000 | Min and Max increased by 100%, with provision for repeated incidents in a year to warrant further increases to the maximum (see fig 1) | |||
| External flooding from sewers | 2 July | Payment equal to 50% of annual sewerage charges (Minimum payment of £75. Maximum of £500) |
Payment equal to 50% of annual sewerage charges, at minimum of £150 and maximum of £1000 | Min and Max increased by 100%, with provision for repeated incidents in a year to warrant further increases to the maximum (see fig 1) | |||
| Failure to make automatic GSS payment | 2 July | £10-20 depending on standard | £10-50 depending on standard | £40 | £100 | 100-200% depending on standard, consolidating all payments to one value for households and one value for non-households | |
Figure 1 –Repeat Sewer Flooding payment bands
| Max | Min | |
|---|---|---|
| Internal Sewer Flooding | £2000 + £500 per repeat occurrence within 12 months | £300 + £100 per repeat occurrence within 12 months |
| External Sewer Flooding | £1000 + £250 per repeat occurrence within 12 months | £150 + £50 per repeat occurrence within 12 months |
Summary of new standards
| New Standard | Coming into force | Information | GSS payments | |
|---|---|---|---|---|
| Household | Non-Household | |||
| Core Priority Services | 1 Oct |
The company must keep a list of customers whose circumstances (such as medical or disability) are such that they require additional services to be provided in certain circumstances.
The company must provide the relevant service to the customer in response to an incident and must inform the customer if they are added to the Core Priority Services Register. |
£100 | N/A |
| Domestic Customer in Arrears | 1 Oct | Giving information relating to the customer’s non-payment to a Credit Reference Agency or beginning legal proceedings to recover the debt without giving the customer an ‘outstanding charges notice’ and an opportunity to make payment arrangements or make representations in connection with them. | £150 | N/A |
| Reading of Meters | 1 Oct | The water company must read a customer’s water meter (excluding smart meters) at least once every 13 months | £40 (£80 for each subsequent 13-month period) | £40 (£80 for each subsequent 13-month period) |
| Moving to Measured Charging Supply of Water | 1 Oct |
The water company must (subject to some exceptions) install a water meter upon request and then begin to charge the customer on the basis of the volume of water used.
If the company fails to do this within the relevant time, the water company must pay the customer. |
Payment equivalent to charges payable in the period from the date that charging by volume should have started until meter fitted and charging by volume begins. | N/A |
| Water Quality Notices | 1 Oct | Payment is to be made to a customer if a water quality notice is served and supply is not restored by the end of a 48-hour period. | If a notice is in place for longer than 48 hours, £40 plus £20 per additional 24 hours that the notice is in place, up to a maximum of the customer’s annual water supply (not including sewerage services) bill | If a notice is in place for longer than 48 hours, £60 plus £40 per additional 24 hours that the notice is in place, up to a maximum of the customer’s annual water supply (not including sewerage services) bill |
| Indexation | 2 July | The payment amounts will increase in line with the consumer price index when this increases by 10% (using September 2025 as the baseline) and rounded to the nearest £5 | ||
