Leader

The debt no one is talking about

Last week saw the publication of the latest tally of water customer complaints, compiled by the Consumer Council for Water.

That the level of disputes escalated to the watchdog had climbed by an unprecedented 84% - and that complaints directly to water companies also soared 56% - is sadly unsurprising.

As Utility Week readers are well aware, 2025/26 saw water customers shift from a long period of bills either remaining flat or dropping, to a harsh new reality. During the period 2025-2030 bills will increase by an average of 36%. In some areas the incline will be much steeper.

The reaction glimpsed through CCW’s research is one of disbelief. We are perhaps guilty of thinking the high profile of the water sector means everyone is well aware of the fact that bills are rising to cover the cost of a huge swathe of investment. The CCW data tells a different story.

While looking into the story this week I was surprised how difficult it was to find an accurate figure for customer debt in the water sector. A quick internet search shows up plenty of info on the arrears racked up by water companies themselves but very little on the situation for their customers.

Eventually CCW were able to point me to some figures by Baringa, based on the annual performance reports from the companies, which showed that as of the end of March 2026 the figure stood at £2.93 billion. This figure is up 4% on the prior year despite 400,000 having cleared their arrears.

Let’s just take a moment to digest that. Until very recently water bills were considered one of the most affordable of household essentials. Yet even before the savage bill hikes coming their way have started to bite, customers already owe nearly £3 billion.

Three.

Billion.

This figure has yet to reach the even more dramatic levels of energy debt but clearly action is needed before we get to the danger zone. Water companies are already proactively utilising their social tariffs but this is an imperfect system relying on other customers to subsidise it. The real risk is that those on the fringes of being eligible for a social tariff themselves are tipped into debt through shouldering their (un)fair share of the burden.

This is why it’s time to reignite calls for a nationwide social tariff, funded through the Treasury as opposed to a regressive tax via bills. Ahead of the October Budget, the new chancellor will no doubt be facing several calls for handouts and perhaps this one will not be at the front of the queue. But procrastination on this impending challenge will only increase its impacts on the most vulnerable in society.

It’s an important debate and we will continue it next week at our Consumer Vulnerability & Debt Conference in Birmingham and at Utility Week Forum in November. I hope to see you there.