Cost of living pressures continue to be a concern for many people. Our cost of living research with customers found that over one half of water bill payers reported struggling to pay household bills over the last year.
From a context of rising water bills, it is even more important that water companies proactively support households who are financially vulnerable – and those who need extra help with services.
Our Paying Fair guidelines are clear about what we expect water companies to do to support their customers to pay bills, get help and repay debts. So, we have carried out a further review of how water companies in England and Wales are committing to our Paying fair guidelines, given continuing cost of living challenges. This builds on the assessment that we published in 2023.
We are pleased with the progress that water companies have made since our last update and positive commitments to improve further. But there is more to do to support customers. We set out on this page the immediate next steps we expect companies to take to improve support and services to customers – and the actions we are taking to challenge them to do better.
Click on the links below to find out more about our Paying Fair guidelines assessment for 2024.
• Introduction
• Meeting our Paying fair guidelines
• Actions to improve services for customers
• Good practice case studies
• Next steps
• Paying fair information from companies
Introduction
For 2024, we requested water companies to:
• confirm (as of 31 March 2024) whether they consider they meet each of the minimum expectations in our Paying fair guidelines, which we issued in May 2022
• explain where they do not meet an expectation but are improving, have taken an alternative approach or think the expectation is not applicable to them
• provide an update on the further actions they identified as part our 2023 assessment to achieve or go beyond the minimum expectations
We also gave companies the opportunity to:
• describe any additional future plans beyond 1 April 2024 to improve services to their customers
• send us case studies that they think demonstrate good practice.
We have reviewed companies’ information and set out our findings below.
Our Paying fair guidelines form part of the suite of guidance relevant to our customer-focused licence condition, which we introduced in February 2024 to encourage higher standards of customer care and support from all water companies in England and Wales.
Meeting our Paying fair guidelines
Overall, water companies report that they are generally meeting our Paying fair guidelines.
• Water companies reported meeting an average of 96% of our minimum expectations. This ranged from 86% (Portsmouth Water) to 99% (Northumbrian Water, Wessex Water and Yorkshire Water) – excluding expectations that were not applicable to individual companies.
• 12 companies reported a small number of expectations where they are not currently meeting expectations but improving their performance. This ranged from 11 (Portsmouth Water) to 1 (Thames Water).
• 13 companies reported a small number of expectations where they take an alternative approach to our expectations where they consider there is information or evidence that indicates this is better for their customers. This ranged from 8 (Portsmouth Water) to 1 (Northumbrian Water)
Companies also report making progress on actions, as well as outlining plans for delivering further improvements and case studies of good practice for their customers.
However, we remain concerned about the impact on customers of cost of living challenges. In particular:
• there has been a continued decline in customer service in the sector and a fall in trust levels – as highlighted by CCW’s Water Matters 2024 report
• water companies continue to receive a high number of complaints from household customers, with CCW’s household complaints report 2023 showing that the majority related to problems with billing and charging;
• customers are likely to continue to face difficult financial circumstances, albeit our cost of living research shows small improvements in customers’ awareness that water companies provide financial support – and the proportion of bill payers reporting that they receive it.
We implemented the customer focused licence condition: Condition G: Principles of Customer Care in February 2024. This condition requires companies to adopt high standards of customer service and appropriate support for the full diversity of its customers’ needs. It is underpinned by a range of relevant guidance, including our Paying Fair Guidelines, which we take into account when assessing each company’s compliance wiuth the licence condition.
Following implementation of the licence condition, we have met with all water companies to hear about the actions being taken to ensure compliance with the new licence condition, including in relation to our Paying Fair guidelines.
In our 2023 assessment we identified that one company was not meeting with the principles of our Paying Fair guidelines (specifically expectations under principal 2). Having reviewed the new evidence, we are now satisfied this company is addressing the concerns we raised and its latest update shows progress across principles.
Our customer-focused licence condition requires companies to understand the needs of their customers and provide appropriate support. We will act against any water company that fails to comply with the licence condition.
Actions to improve services for customers
Companies have told us about lots of actions that they are taking which should result in improvements in services for customers. Almost all water companies identified actions to achieve or go beyond the minimum expectations in our 2023 assessment.
We asked each company for an update on their actions as part of our 2024 assessment
Overall, of the 185 actions identified, companies reported:
• 87 completed (47%)
• 82 in progress (44%)
• taking alternative action in 13 instances (7%)
• deciding not to take forward two (1%) proposed actions.
Water companies told us about a range of completed actions to improve services for customers. We highlight some examples below, grouped by the different focus areas within Paying Fair. More details of each company’s actions can be found in their submitted information at the bottom of this page.
Supporting all customers pay their bill
• Anglian Water highlighted actions to make it easier for customers to pay their bill through extending their range of free counter payments to include the Post Office. Customers have been able to pay their water and wastewater bill free of charge at the Post Office from 1st April 2024.
• Northumbrian Water’s call system is now able to retain a preferred time of call for the customer should they specify, meaning the company’s outbound calls can be adapted to suit the customers’ preference regarding a more convenient time to engage.
• Yorkshire Water report also implementing a new customer management system in 2023-24. The company says this has the functionality available to capture more communication channel preferences for customers and preferred contact times. The company says that it plans to develop this functionality further and embed it fully within their customer service processes.
• Severn Trent Water says it has had success in reducing down the volume of void properties across its region. Severn Trent have used credit reference agency, Cabinet Office and Land Registry data to reduce the overall volume of empty properties by 29% since December 2022. Reducing void properties results in cost savings that can be passed on to customers.
Supporting customers in vulnerable circumstances
• Affinity Water say their affordability hub is available for all its employees. Employees’ knowledge and awareness is reinforced through weekly ‘what you need to know’ messages and the company include information on affordability solutions and debt advice organisations. Affinity Water has a joint branded page with National Debtline which means customers have direct access to advice. Affinity Water intends to explore how it can support customers with more relevant signposting through the National Support Network.
• Bristol Water and Wessex Water report an action of more formally documenting their approach to managing the accounts of deceased customers. The companies now have a simple online form to help customers advise them of a deceased customer at a time and place convenient to them. Both companies also signpost to ‘Tell us once’ a service that lets you notify most government organisations in one go along with Life Ledger, Settled and the Death Notification Service.
• Dwr Cymru note successfully achieving the ISO22458 Inclusive Service standard, which the company say demonstrates its commitment to and culture of inclusive service. The company outlines a number of examples of actions it carries out to be inclusive by design.
Supporting customers in debt
• Hafren Dyfrdwy reports having taken action to promote financial support on envelopes, as well as continuing to promote support available on bills. Hafren Dyfrdwy provides bill inserts on a frequent basis with information on financial support available, and it has community teams across the region hosting events/drop ins at community centres, benefits offices, foodbanks and charities delivering bespoke one-to-one support for customers.
• South Staffs Water report having Standard Financial Statement membership with the Money Advice Service. South Staffs Water has updated their code of practice to reflect this and embedded the approach across its operations.
• Southern Water has put in place redesigned collection letters with a focus on maximising engagement from customers and promoting the help available to those in need of financial support. Thames Water has also carried out a review of debt recovery customer communications to align with the Paying Fair Guidelines, including letters, emails and SMS.
Future plans to improve services for customers
We gave all water companies the option to describe any additional future plans beyond 1 April 2024 to improve services to their customers.
Below are some examples we heard from companies. More details of each company’s future plans can be found in their submitted information at the bottom of this page.
Supporting all customers pay their bill
• Severn Trent Water is introducing a new operating system for customer service. The company say the new system will help it introduce faster and more efficient customer service through AI technology and automation, improving productivity and enhancing how the company communicate with its customers. The company says it has also taken the opportunity to display clearer information on its bills to help customers understand its charges and payments better.
• SES Water plans to review and re-design its bills in 2024-25. The company will conduct customer research as part of its work to re-design and simplify its bill so it’s more accessible for customers. The company plan further improvements to the customer experience and the communications it sends later in the year, following on from implementation of its new communication platform in July 2023.
• United Utilities is working to develop a new end to end digital process focusing on validation and enrichment of core customer data. The company say that the new process will deliver a solution that enables direct customer validation alongside the use of third-party data to optimise data used for billing, collection, tariff eligibility and water usage calculations.
• Northumbrian Water is looking to add in proactive alerts and more links to water efficiency information tailored to customer consumption patterns as part of its smart meter rollout. The company hope this will help customers avoid bill shocks and identify leaks earlier. Northumbrian Water has been communicating early leak alerts with smart metered customers during 2023 and are continuing to develop its communications and support approaches around these alerts.
Supporting customers in vulnerable circumstances
• Affinity Water has established its own internal customer panel to help its employees seek feedback and improve services. The company is establishing a new customer feedback option on its website, so customers can share their real-life challenges with Affinity Water in more detail and inform ongoing improvement plans. The company is also planning to engage financially vulnerable customers in the autumn of 2024 to understand their challenges and how the company can better support them.
• South West Water is working with Scope to ensure transparency of the service customers receive when signing up to Priority Services which includes communication methods for billing purposes.
• Yorkshire Water has recently evolved its use of credit reference data to start to establish a robust affordability scorecard rather than only for debt recovery activity. This will enable the company to assess potential customer support needs. This will be evolved and embedded throughout 2024-25 to ensure Yorkshire Water are utilising credit reference data to the best of its ability to support customers with bill affordability and financial help.
Supporting customers in debt
• Southern Water is in the process of partnering with Money and Pensions Service (MaPS), which will enable the company’s agents to refer customers directly to the Money Advisor Network, where they can receive an immediate callback (or at an alternative time of their choosing) and professional debt advice provided.
• South East Water will carry out a new tender process for Debt Collection Agents in 2024. As part of the tender the company will include the requirement that all agencies must have the necessary skills within their teams to support vulnerable customers.
• Portsmouth Water is working with their debt collection agencies to provide better access to information. The company will be going through a tender process during 2024 and they will enhance their audit requirements within those contracts.
• Thames Water plans to enhance its debt referral process to include income maximisation services using a module provided by In Best, who also provide the Money Helper income maximisation tool. Thames Water will pilot this in 2024-25 and assess the benefits against costs of implementing.
Good practice case studies
A number of companies shared case studies in areas where they believe they are delivering good practice for customers.
Below are summaries of a selection of these case studies, as reported by companies. The full case studies and others are available in the company information at the bottom of this page.
Supporting all customers pay their bill
• Supporting care leavers: Bristol Water and Wessex Water have a trial in place in collaboration with South Gloucestershire Council, to help care leavers as they leave the security of the system at the age of 18 years. To make this transition easier the companies automatically apply a 90% discount to their water bill as part of their Assist scheme up until they reach the age of 21. Once at this age, the companies guide them through the renewal process to assess their current need for affordability support. The aim is to expand the trials to other Councils in the companies’ supply areas in 2024.
• A one stop shop for debt advice: In 2023, as many households struggled to make ends meet due to cost-of-living pressures, United Utilities opened up its Hardship Hub to all – a “TripAdvisor” style one stop shop for debt advice providing easy access to around 576 support schemes from 290 different organisations. Making the Hub publicly accessible and expanding access beyond just thirdsector support organisations has helped to expand the reach of the local, regional and national services helping customers access support when they need it. Since its relaunch in July 2023 the site has been visited over 14,000 times.
• Engaging unresponsive customers: Northumbrian Water worked with a tech start up, to improve engagement with unresponsive customers and make the process of assessing their eligibility for affordability support easier for customers to complete. The company states that engagement rates with customers have improved from less than 10% to over 30% – with 85% of customers completing the ‘Budgie’ tool – and £750,000 of benefits have been identified.
Supporting customers in vulnerable circumstances
• Water Assistance Payments – Supporting households with Cost-of-Living: Affinity Water has used data sharing, its own data and developed a referral scheme with 10 organisations to reach households feeling the strain with cost of living. Eligible households receive a credit which is applied directly to their account. The award is worth about six months of a Low-Income Fixed Tariff water bill or 25% off the average water only bill. Affinity Water has helped about 30,000 customers – and aims to double the level of support to 60,000 households during 2025-30.
• Working with partners to reach disengaged rural customers: Anglian Water engages with more than 100 charities and community groups each year, with the goal of identifying customers that need support and offering it to them. One such partnership is with ‘The Bread and Butter Thing’, an affordable mobile food club offering low cost weekly shopping bags for people on low incomes. Working together Anglian Water has been able to build relationships with some of their most disengaged rural customers, who face loneliness and financial strain. The company is committed to rolling out this partnership across its region.
• Communicating better with deaf customers: South West Water, Bristol Water and Wessex Water have partnered with SignLive to provide new ways for customers who use British Sign Language (BSL) to contact their teams. SignLive is a deaf-owned and deaf-led company that understands the needs of customers and is dedicated to removing barriers to communication for customers who are deaf. The water companies can offer a free video relay service that connects the customer to a qualified online BSL interpreter. The interpreter will relay the conversation between the customer and a member of the water company’s team. SignLive can also be used for face-to-face conversations with the water companies’ staff if they need to visit a customer’s home who uses BSL and can be easily accessed via a mobile app.
• Supporting those most impacted by cost of living pressures: Thames Water has adopted the ‘affordability threshold’ as the eligibility criteria for their social tariff after piloting over 2023-24, in consultation with CCW. This criterion, which reflects the affordability of a water bill, aligns support to customers most impacted by the cost of living crisis – younger, larger families. and the company suggests this could be adopted as a consistent social tariff criteria across the industry. Where customers are not eligible for the company’s social tariff, but have a deficit budget, they are eligible for Thames Water’s ‘Extra Support Scheme’. This was launched in April 2023 in response to the cost of living crisis and distributed £3million of support. The company aim to increase this to £7million in 2024-25.
Supporting customers in debt
• Grant for customers in long term debt: South West Water has the Freshstart grant. It is awarded to customers that have accumulated debt in the previous two years due to extraordinary circumstances. The value of the grant can clear a customer’s debt and contribute to their ongoing payments until their situation is more stable. Freshstart involves the company doing a full check of the account with the customer and ensures those eligible for support receive it.
• A different approach to debt recovery: Dŵr Cymru trialed a different collections approach to reach customers in long term debt. The collections team created a ‘pop-up’ Help with Bills event in the local community centre within the customer’s vicinity. One customer they reached had not been in contact for nine years. As a result, the company were able to put him onto a payment plan and provide him with support through their assistance fund.
• An innovative partnership to help customers that miss payments: Yorkshire Water joined forces with an organisation that helps businesses understand the reasons why their customers have missed payments and uses technology to signpost additional support that is available to them, helping to build resilience and wellbeing for customers. In an initial trial 1,000 customers of 2,000 sent a questionnaire were signposted to external support to help them get back on top of their finances, as well as other areas where they required additional support. In addition, Yorkshire Water wasable to provide specific water bill support to more than 150 customers. The pilot has now been expanded to 12,000 customers.
Next steps
Ofwat will continue to challenge companies to ensure they deliver a good standard of service to customers who are struggling to pay. As part of this, we are publishing every water company’s Paying fair information to provide transparency to customers and customer representatives, as well as a resource for all companies to learn from each other and enable good practice to be fully embedded across the sector.
Companies should consider our findings and whether there are any further improvements they need to make to their approach at this time, including in light of the UK Regulators Network’s recently published shared regulatory expectations on debt collection. We take companies’ approaches to our Paying Fair guidelines into account when considering compliance with our customer-focused licence condition
Working with CCW, we will continue to scrutinise how companies are supporting customers to pay bills, get help and repay debts.
CCW is piloting debt audit assessments with individual companies to help us check and verify company performance in this area in future.
We will publish an analysis of companies’ support for customers struggling to pay and customers in debt later in the year.
Billing and charging will be a focus area for us going forward, especially as these areas are by far the biggest cause of complaints for almost all companies and to CCW according to CCW’s Household customer complaints report. This is concerning at a time when many customers are struggling to pay their household bills.
Accurate bills – and customers receiving clear and accessible information on billing and support in a timely way – are important for preventing households being pushed into financial difficulty. That is why we will be carrying out important research into customers experiences of billing, to highlight areas where companies can do better for their customers.
Finally, we remind all companies – including local water companies (new appointments and variations (NAVs)) of the importance of continuing to meet and exceed our minimum expectations as they change, adapt and improve their systems, policy and delivery for customers.
Paying fair information from companies
You can read all the information that water companies sent us here. We are sharing this information in full to provide transparency to customers and customer representatives. It also provides a valuable resource for all companies to learn from each other.