UK water rate increases: How to avoid cost increases

Earlier this year, UK businesses experienced large increases in water rates, driven by a combination of higher wholesale costs and retail price adjustments.

To encourage operational efficiencies and make significant cost savings, your business can explore switching water suppliers or adopting innovative solutions like Automated Meter Reading (AMR). 

Why have UK business water rates increased? 

Water rates are determined based on a comprehensive price review process undertaken by Ofwat, using plans submitted by wholesalers that dictate price controls. The water rate increases are tied to rising wholesale water costs, which make up the bulk of what businesses pay for water.

The most recent five-year plan submitted to Ofwat was PR24, which runs from 2025-30. In April, wholesale charges were set to increase by an average of 42% before inflation over the five years from 2025-30. However, in February it was announced that six wholesalers disagreed with Ofwat’s decision and have now appealed. Thames, Anglian, Northumbrian, South East, Southern and Wessex Water have requested a referral to the Competition and Markets Authority (CMA) for a redetermination of their business plans for 2025-30.

On average, the wholesale increase for 2025 to 2026 will be around 20%, with some areas increasing over 35%.

These price adjustments will also reflect the industry’s response to challenges like water scarcity, population growth, and environmental protection requirements. to be priced to fund essential infrastructure projects. Charges are expected to be priced to fund building new reservoirs, upgrading sewage treatment facilities, and rolling out smart water meters across the country.

Retail prices, which cover customer service and billing, will rise alongside wholesale costs, compounding the financial impact on businesses.

Why businesses shouldn’t just stick with their default water supplier

Despite deregulation of the UK water market – introduced in Scotland in 2008 and England in 2017 – only about 25% of businesses have taken advantage of the opportunity to switch suppliers. Staying with your current supplier and not reviewing your water management strategy could mean paying more than necessary, with price increases now in effect.

Water tariffs vary significantly between suppliers, and businesses that fail to review their contracts may end up with less competitive rates. Additionally, many businesses remain unaware of billing errors or inefficiencies in their water usage that could be costing them money. This is where working with an energy expert can help you to become more efficient and save you money on retail fees.

Smart water management – the opportunity to save 

A smart water management approach includes identifying inefficiencies, addressing infrastructure issues like leaks, and providing guidance to reduce consumption and costs over the long term. With the help of technology and expertise, your business can:

• Unlock lower tariffs 
  By analysing your current water usage and supplier rates, you can identify better tariffs that match your business needs. (On average, our clients save over £11,500 annually* by switching suppliers through our services.)
• Reduce consumption and carbon impact
  By implementing water conservation measures, businesses can reduce their overall water spend by up to 60% whilst reducing the carbon impact associated with water use, and lowering energy bills where heated water is required.
• Recover historic overpayments 
  Billing errors are surprisingly common, with as many as 1 in 8 water bills containing mistakes**. (Our audits have helped businesses recover thousands of pounds in refunds for overcharges.)

How can you manage water supply more sustainably?  

Discover how AMR – smart water management technology – can help your business secure better water rates, track real-time usage, and unlock sustainable savings – click to learn more.

Switching to AMR can revolutionise the way your business manages its water usage:

• Real-time insights & alerts: Monitor water usage in 15-minute intervals, detect leaks, and address inefficiencies promptly with automated alerts.
• Cost savings & accurate billing: Eliminate manual errors, ensure accurate billing based on actual usage, and reduce disputes and overcharges.
• Sustainability & efficiency: Optimise water usage to reduce waste and carbon footprint, while freeing staff from manual readings with easy, non-disruptive installation.

By combining these benefits and many more, AMR not only saves money but also supports your business’s sustainability and efficiency goals.

Why act now?

It is widely anticipated that April’s increases may represent the largest price rises in nearly two decades, making now the ideal time to review your water supplier. By reviewing your water management plan before the new rates take effect, your business could:

• Avoid unnecessary price increases by switching to a more competitive tariff.
• Lock in savings that could buffer your finances against future increases.
• Gain peace of mind knowing your water costs are optimised.

Click here to explore the full range of advantages AMR offers.

World Kinect can help your business reduce your water supply costs in a number of ways including introducing you to the powerful benefits of AMR technology to revolutionise your water management strategy.

 Why choose World Kinect?

World Kinect has a proven track record of delivering significant utility savings and providing expert support to businesses of all sizes. As an accredited member of the Utilities Intermediary Association, we uphold the highest standards of integrity and service.

Our commitment to your business:

• Expertise: Decades of experience in utility procurement and management.
• Comprehensive solutions: From procurement to water audits and AMR installation, we offer end-to-end support.
• Trusted expert: Hundreds of UK businesses rely on us for their water and utility needs. Take action today

Don’t let the April 2025 water price increases take your business by surprise. Whether you’re looking to switch suppliers, optimise your water management with AMR, or both, World Kinect is here to help.

Get started now: 

• Contact us for a free consultation to review your current water contract.
• Discover how much your business could save with better tariffs.

Explore AMR technology to gain real-time control over your water usage.

*Based on the water procurement contracts that World Kinect completed in the first quarter of 2024, and the average savings achieved against clients’ existing water contracts and rates across various business sectors. This number represents the average savings across businesses with different annual spending.

**Based on World Kinect’s water audits completed in 2023. Of 4200 sites audited, 504 were found to contain an error.