From 1st April 2025, organisations across the UK will see their water bills rise significantly. Analysis into published wholesale charges by Equity Energies reveals that prices are set to increase by an average of 22%.

With inflation, regulatory shifts, and sustainability initiatives driving these changes, organisations should ensure they are taking proactive steps to manage expected increases in their water costs effectively.

We understand the impact these rising costs can have on business operations. That’s why our water consultancy team is on hand to help organisations navigate these changes, optimise consumption, and reduce unnecessary expenditure.

First, let’s dive into what’s happening, and why.

 

 Why are water prices increasing?

Every year, Ofwat, the UK’s water regulator, sets revenue controls which allow wholesalers and retailers to recover a fixed amount of revenue. For 2025-26, there are several factors influencing and driving up costs from suppliers:

Inflation: Charges for 2025-26 will reflect the November Consumer Price Index figure published by the Office for National Statistics. The latest forecast figure is 3.5% – so worth noting that this may be higher or lower by the time final charges are set.

AMP8 – a major industry overall: Beginning on 1st April and running for the next five years, AMP8 (Asset Management Period) represents a transformative five-year period for the industry designed to improve and optimise service levels. As the next phase in a range of regulatory cycles for the water industry, the focus around financial and operational expectations for water companies will be deliverability, affordability and sustainability. This ambitious plan focuses on:

  • Digitalisation – increased investment in data-driven water management.
  • Proactive Management of Combined Sewer Overflows (CSOs) – shifting from reactive fixes to preventative solutions.
  • Nature-based solutions – incorporating Biodiversity Net Gain (BNG) and Sustainable Drainage Systems (SuDS) to improve environmental sustainability.

While these initiatives are crucial for a greener and more sustainable future, their funding – through investment and borrowing – will ultimately be recovered via increased charges for customers.

Low-income discount social tariff: there will be expected increases in cross-subsidy funding to help support discounts for customers in financial need.

Large user tariff: Suppliers are applying a phased approach to reducing the discount larger users attract. Most customers will see increases to their bills which are 3-4% higher than standard non-household charges. Currently, there are over 800 non-household connections attracting large user tariffs and it is expected that these discounts will be phased out by 2026-27.

New ammonia charge for trade effluent: UK water companies use a mathematical formula called the Mogden Formula to calculate the fee that a business must pay to use the sewer network and treat their wastewater. Businesses that have consent to discharge trade effluent (the sewage that comes from commercial processes) into a public sewer pay trade effluent charges and it is expected that the introduction of a separate charge for ammonia will occur through a phased approach in the coming years, driving costs up in some instances.

 

Water costs don’t need to be a drain on your business

With water prices set to rise, businesses cannot afford to take a passive approach to water management. Our water consultancy team are on hand to advise on ways to safeguard your business from surges in wholesale water pricing, such as:

Invoice validation: validating your water and waste invoices ensures you’re paying the correct charges. Our bureau team can validate your invoices and provide reporting on consumption and budgeting to help you keep track of, and plan for, ongoing usage and costs.

Procurement: if your water supply is in England or Scotland, did you know you can change supplier? We can tender your supply out to water retailers on your behalf, helping you find the best deal. We already save our clients on average 5-8% per annum.

Project management: we can help in project managing the installation of technology such as Automated Meter Reading (AMR) devices which provide 15-minute data updates on water use. We can also manage intelligent monitoring of specific areas on your site or within your business to track real-time consumption levels. If usage exceeds benchmarks or tolerances, we can provide quick resolutions and support cost-efficiency changes, identified through data management.

Additional things businesses should consider include tariff optimisation, conducting efficiency audits and other sustainability project support which can unlock savings whilst addressing water waste.

 

No longer swimming against the tide

The April 2025 water price increases are just one part of a rapidly evolving landscape for businesses. By acting now, organisations can mitigate rising costs, improve efficiency, and work towards more sustainable water management practices.

At Equity Energies, we’re here to help businesses make informed decisions that protect their bottom line while supporting long-term environmental goals.

Amy Collins, Solutions Architect 

Contact Amy to discuss how we can help your business take control of water costs and build a more resilient future.