The Consumer Council for Water (CCW) commissioned the University of York to undertake an analysis of water poverty in England and Wales using 2024/25 national household survey data - effectively a baseline analysis. The University has been analysing water poverty since 2013, including in collaboration with CCW. This latest analysis is a new collaboration, which will be followed by annual update reports.

The consumer watchdog commissioned the research to:

Introducing the report, CCW says for many households the recent surge in water bills, combined with wider cost-of-living pressures, has made paying for water services an increasingly difficult challenge.

One way of understanding the scale of the problem and the extent to which water company support schemes, such as social tariffs, are mitigating the impact is to examine the proportion of household income (after housing costs and adjusted for family size) which is being spent on water services.

Under its December 2024 price determinations, Ofwat allowed water and sewerage companies to increase their charges by an average of 36% above inflation over the next five years from April 2025. Following appeals by five companies, the Competition and Markets Authority subsequently allowed a further average increase of 2.2% in the bills for customers of those companies.

The analysis uses the conventional definitions of water poverty: the percentage of households spending more than 3% and 5% of their net equivalised income (ie adjusted to take account of household size) after housing costs (AHC). Equivalised income is used in the government poverty measures and internationally.

Key findings

Based on the 5% water poverty measure, the analysis indicates that 6.8% of households in England and Wales faced water poverty in 2024/25, constituting around 1.8 million households. That figure increases to 15% (4 million) when considering the households spending more than 3% of their income AHC on water.

Lower-income households that are spending more than 5% of their income after housing costs on water services are generally considered to be facing water poverty.

The rates of water poverty at the 5% level were broadly similar in England and Wales when considered separately, but slightly higher in Wales at the 3% water poverty level.

The median value by which the bills of those in water poverty exceed the 5% spend threshold, taking England and Wales as a whole, is estimated to be around £337 per annum.

In terms of demographic breakdown, there are significantly higher levels of (5% measure) poverty amongst the following groups:

The findings show those who have been in arrears with water charges in the past 12 months are more than twice as likely to also be in 5% water poverty and almost three times as likely to be spending more than 3% of their income on water charges

The impact on households

Households experiencing water poverty often face a significant gap between what they can reasonably afford and what they actually pay. For households in water poverty using the 5% measure, bills exceeded the affordability threshold by a median of around £337 per year.

Differences across water company areas

The study found that water poverty rates vary across different water company regions. Some areas showed higher levels of water poverty than others, highlighting that affordability challenges are not evenly distributed across England and Wales.

CCW highlight in the report that the statistical reliability of regional data varies depending on the size of the sample surveyed in each water company region.

Analysis to be undertaken annually to track water poverty over time

Going forward, CCW will undertake the analysis annually in order to track water poverty rates over time. CCW says this will provide invaluable insights on the impact of rising water bills, and the extent to which this is being mitigated by increased financial support from water companies – including local social tariff schemes.

The findings will help identify the customers and communities most at risk of water poverty, helping CCW to focus attention on where support is most needed. The report will also help CCW to assess progress in reducing water poverty.

CCW will use the evidence to discuss with water companies the support they provide for customers struggling to pay their bills.

Informing decisions about strengthening financial support

The research shows that millions of households face affordability pressures and that the problem varies across different groups and regions.

CCW will use the evidence to help inform future decisions about the need to strengthen and improve the consistency of the current framework of financial support for those households struggling to pay.

CCW believes that a new national social tariff is needed in order to fully address the water poverty challenges facing water customers. The introduction of such a scheme was the headline recommendation of the customer watchdog’s 2021 review of water affordability for UK and Welsh governments. It was also among the final recommendations put forward in the Independent Water Commission’s review of the water sector.

Click here to download the full analysis Analysis of water poverty in England and Wales (2024/25)