50% Increase in Thames Water Bill

Miakoda

@ MattMattMattUK .   Some things you write are indeed correct however I think its the way that you communicate that immediately makes me feel frustrated and annoyed with your replies. One comment I do not agree with "As usual in this country we pay too little and expect too much" .  Firstly there is plenty of money being paid from us, its how it is being spent that is the issue and no one is managing this correctly in my opinion .  Chris Weston, the Chief Executive of Thames Water, has a total pay package of up to £2.3 million, including a base salary of £850,000, a potential bonus of up to 156% (or £1.3 million), and pension and benefits.  Thames Water has been criticized for making dividend payments to its parent company, Kemble, despite facing financial difficulties and regulatory issues. Ofwat has fined Thames Water for violating dividend payment rules, including the payment of £37.5 million in October 2023 and £158.3 million in March 2024. The company is also planning to pay out approximately £2 billion in dividends over the next decade, potentially exceeding £290 million annually.   So based on what you are saying that there hasn't been enough investment and our payments have been too low to keep the infrastructure up to date ..  I disagree completely.  They supply approx. 4 million homes and right now they have raised the monthly bill by approx £15.  per house hold.  This would bring in an extra £60M per year .  However they would have saved more had they reduced salaries and dividend payments !   I have a business myself and the first thing anyone reduces when in trouble is the salary bill!  You don't pay out to your shareholders when the company is in financial troubles.  Secondly,  It certainly is not the customers fault that the charges have not been lifted year after year, if this was needed.  This is down to again, bad management!  so, no I disagree that as a customer I now have to pay double for bad management and big payouts to bail them out!.  I do not pay too little and expect too much!   I do expect fair pay and a service to meet trading standards and be properly managed.  There used to be trading standards in this country however like everything else ., its gone to turd. 

MattMattMattUK

Miakoda said:

@ MattMattMattUK .   Some things you write are indeed correct however I think its the way that you communicate that immediately makes me feel frustrated and annoyed with your replies. One comment I do not agree with "As usual in this country we pay too little and expect too much" .  Firstly there is plenty of money being paid from us, its how it is being spent that is the issue and no one is managing this correctly in my opinion 

It is not. If you account for all the profit extracted from the water suppliers since privatisation, it is nowhere near the shortfall in investment required. 

Miakoda said:

Chris Weston, the Chief Executive of Thames Water, has a total pay package of up to £2.3 million, including a base salary of £850,000, a potential bonus of up to 156% (or £1.3 million), and pension and benefits.  

The equivalent of 38p per customer per year, whilst the headline figure might seem a lot it makes little if any difference to the consumer's price, especially when one realises that the CEO of a publicly owned company would still need a remuneration package. Whilst it may or may not be the same amount, it is unlikely to make any real difference to the consumer.

Miakoda said:

Thames Water has been criticized for making dividend payments to its parent company, Kemble, despite facing financial difficulties and regulatory issues. Ofwat has fined Thames Water for violating dividend payment rules, including the payment of £37.5 million in October 2023 and £158.3 million in March 2024. The company is also planning to pay out approximately £2 billion in dividends over the next decade, potentially exceeding £290 million annually.   

Thames Water has certainly behaved in a way that would not be tolerated in many other sectors and there is an ongoing investigation into their business. Personally I think that it should be nationalised, but that will not solve the issues. The regulator technically has the power to order those dividends be recovered, it should be doing that. The company was hoping to pay out those dividends, but there is no way they will be approved. 

Miakoda said:

So based on what you are saying that there hasn't been enough investment and our payments have been too low to keep the infrastructure up to date ..  I disagree completely.  

You can disagree, but the independent assessments have all said the same. Whilst dividend payments have contributed to the shortfall in investment the real issue is that bills have been kept too low for too long.

Miakoda said:

They supply approx. 4 million homes and right now they have raised the monthly bill by approx £15.  per house hold.  This would bring in an extra £60M per year . 

Estimates are that Thames Water alone (other water companies have similar issues, although not quite so bad) need to invest around £20 billion in the network over the next decade to bring it up to standard. The additional £60 million a year is not even going to touch the sides.

Miakoda said:

However they would have saved more had they reduced salaries and dividend payments !

They could, dividend payments are an easy win in that respect, the wage bill is a lot harder because most of their staff costs are operational staff, not C-suite. 

Miakoda said:

I have a business myself and the first thing anyone reduces when in trouble is the salary bill! 

Not always, especially when in a regulated industry they are required to maintain staffing levels. They are also not in a competitive market so do not face customer retention pressures and their pricing is also set by the regulator, when allowing for operational costs, so it is vastly more complicated than you seem to believe.

Miakoda said:

You don't pay out to your shareholders when the company is in financial troubles. 

Not normally no, hence the investigation currently going on, as a company that appears to be potentially insolvent paying a dividend is a breach of trading and accounting regulations. 

Miakoda said:

Secondly,  It certainly is not the customers fault that the charges have not been lifted year after year, if this was needed.  This is down to again, bad management!  

The bills were not set by the management, they were set by the regulator, the prices were held down at the request of the minster, so in effect the government. They may have been exacerbated by the policies and actions chosen by the management of the company, but they were not the primary cause.

Miakoda said:

so, no I disagree that as a customer I now have to pay double for bad management and big payouts to bail them out!. 

There are three options, carry on with the current mess and allow bills to rise to cover the required investment, privatise them and allow the bills to rise to cover the investment, or privatise them and fund the costs from taxation. 

Miakoda said:

I do not pay too little and expect too much!   I do expect fair pay and a service to meet trading standards and be properly managed.  

The reality is water in the England and Wales is too cheap, in other countries it is either more expensive, or subsidised from taxation. Fair would involve paying enough to maintain and develop the network, we are currently not. There can be arguments about privisation but they are a distraction, the profit extracted represents 5-10% of the overall shortfall, with the other 90-95% being because we pay to little.

Miakoda said:

There used to be trading standards in this country however like everything else ., its gone to turd. 

We have had 40 years of the electorate voting to lower taxes for their own benefit, services and investment cut back because of that, the rot set in but it took decades for the structural failures to start to show from that rot. Those generations that voted for tax cuts for themselves and huge borrowing are not retired and protected by the triple lock, their children and grandchildren are left with failing infrastructure and huge debts. 

Brosgidi

We are a family of 4.
Both parents work, both kids are teenage school kids, so I would not say we are above average water users.

Over the last 12 months, our monthly bill has been increased from £49 to £76, a 55% increase. 
I accepted that as reasonable but I received another email yesterday increasing our payment to £104 a month, another 37% increase.
So I have had a 112% increase over a year.
I deem this to be excessive and from what I am reading here, I am being proven right.

Are there any other 4 people families who have experienced the same??

I am hoping to take this up with Thames water or  Ofwat, although I am feeling that I will get no joy and will just have to yield to the power of this monopoly.

mmmmikey

Brosgidi said:

We are a family of 4.
Both parents work, both kids are teenage school kids, so I would not say we are above average water users.

Over the last 12 months, our monthly bill has been increased from £49 to £76, a 55% increase. 
I accepted that as reasonable but I received another email yesterday increasing our payment to £104 a month, another 37% increase.
So I have had a 112% increase over a year.
I deem this to be excessive and from what I am reading here, I am being proven right.

Are there any other 4 people families who have experienced the same??

I am hoping to take this up with Thames water or  Ofwat, although I am feeling that I will get no joy and will just have to yield to the power of this monopoly.

Hi - there are a number of things that can cause a bill to jump like that and that's a big bill so it's worth trying to work out why. Although costs have gone up, they haven't gone up by anything like that much so there's more to it than that. Possibilities include:

1. You are using a lot more water. You can check this by looking at your bill. What did you use on average last year (in litres of m3) and how does it compare with previous years? Although this sounds a bit obvious, if it is the case that you're using a lot more water the reason might not be obvious. Water leaks are always a possibility and they're not always visibile. Also, things like having a new shower fitted, changing your washing machine and using a different programme can add up. And teenage children can be expensive and unpredictable - is someone spending waaaay too long in the shower or obsessing about teeth cleaning and leaving the tap running? You get the idea, first thing to do is to work out if your usage has gone up and then you can try and figure out why.

2. Monthly payment plans. The scenario that can clobber you here is: (1) the monthly payment is based on an estimate and because habits change and for various other reasons the estimate can be wrong (2) if, for whatever reason, your monthly payment in the previous year wasn't enough to pay the bill, any amount you owed at the end of last year would be added to to what you pay this year. (3) suppose your payment last year was £49, but that wasn't enough to cover things and you really should have been paying £13.50 per month more to end up quits at the end of the year (4) even without any price increase or change in usage, your bill would need to go up by £13.50 a month to make sure you pay enough this year, and another £13.50 a month to cover for last year (5) so this could account for the increase from £49 to £76. And the double whammy here is that there will be big price increases on top of that. This can work in the other direction too - if you overpay in a year you'll underpay the following year and this can result in the bill see-sawing for a few years. You can check if this is happening by looking at your last bill - did you overpay or underpay last year?

Well worth checking these things before you get on to Thames Water of Ofwat, hope you manage to work out what's going

Brosgidi

mmmmikey said:

Brosgidi said:

We are a family of 4.
Both parents work, both kids are teenage school kids, so I would not say we are above average water users.

Over the last 12 months, our monthly bill has been increased from £49 to £76, a 55% increase. 
I accepted that as reasonable but I received another email yesterday increasing our payment to £104 a month, another 37% increase.
So I have had a 112% increase over a year.
I deem this to be excessive and from what I am reading here, I am being proven right.

Are there any other 4 people families who have experienced the same??

I am hoping to take this up with Thames water or  Ofwat, although I am feeling that I will get no joy and will just have to yield to the power of this monopoly.

Hi - there are a number of things that can cause a bill to jump like that and that's a big bill so it's worth trying to work out why. Although costs have gone up, they haven't gone up by anything like that much so there's more to it than that. Possibilities include:

1. You are using a lot more water. You can check this by looking at your bill. What did you use on average last year (in litres of m3) and how does it compare with previous years? Although this sounds a bit obvious, if it is the case that you're using a lot more water the reason might not be obvious. Water leaks are always a possibility and they're not always visibile. Also, things like having a new shower fitted, changing your washing machine and using a different programme can add up. And teenage children can be expensive and unpredictable - is someone spending waaaay too long in the shower or obsessing about teeth cleaning and leaving the tap running? You get the idea, first thing to do is to work out if your usage has gone up and then you can try and figure out why.

2. Monthly payment plans. The scenario that can clobber you here is: (1) the monthly payment is based on an estimate and because habits change and for various other reasons the estimate can be wrong (2) if, for whatever reason, your monthly payment in the previous year wasn't enough to pay the bill, any amount you owed at the end of last year would be added to to what you pay this year. (3) suppose your payment last year was £49, but that wasn't enough to cover things and you really should have been paying £13.50 per month more to end up quits at the end of the year (4) even without any price increase or change in usage, your bill would need to go up by £13.50 a month to make sure you pay enough this year, and another £13.50 a month to cover for last year (5) so this could account for the increase from £49 to £76. And the double whammy here is that there will be big price increases on top of that. This can work in the other direction too - if you overpay in a year you'll underpay the following year and this can result in the bill see-sawing for a few years. You can check if this is happening by looking at your last bill - did you overpay or underpay last year?

Well worth checking these things before you get on to Thames Water of Ofwat, hope you manage to work out what's going

Thank you mmmmikey.

Turns out what happened is similar to what you outlined in scenario no2.
When we were paying £49, we were not paying enough which is why it was increased to £76.
£76 was only for about 4 months till we received the £104 bill this week.

Thames water nicely explained to me that when they calculated my last bill, I was owing £105.

So now they have included that in my future payments for the next 6 months.
After 6 months, it will be reviewed and I am assured that provided we have not drastically increased our water use, it will go down with a possibility of me being in credit too.

So in short, the increased bill of £104 is to cover previo7us under payments and make sure that I do not owe anything be the end of the next billing cycle, which makes sense.

I have to say, despite all the trouble they are in, the customer services department is still operating efficiently.

KsMan

I have just received my new bill and Thames Water are putting my bill up from £23/month to £55/month a 139% increase! I am a metered user and my actual consumption has gone down from the last period soo even with the so called average increase of @40% this appears unjustified . I am a single occupant of a small 2 bed house so it’s a shocking increase. 

I would point out that the unit charges for water and waste have only increased by 29.2% and 31.2% for water and waste but the fixed charges have increased by > 120%. Are they allowed to increase them by this much? The fixed costs are obviously a relatively small part of the total so these new charges just seem wrong.
i am going to appeal this and any helpful pointers on how I should do this would be appreciated 

QrizB

KsMan said:

I would point out that the unit charges for water and waste have only increased by 29.2% and 31.2% for water and waste but the fixed charges have increased by > 120%. Are they allowed to increase them by this much? The fixed costs are obviously a relatively small part of the total so these new charges just seem wrong.

The charges are as agreed with Ofwat. So yes, they are allowed to increase them by this much.

KsMan said:

i am going to appeal this and any helpful pointers on how I should do this would be appreciated 

I'm not sure what grounds you plan to use for your appeal?

KsMan

It’s Ofwat actually! Only helpful comments or please don’t bother.

QrizB

KsMan said:

It’s Ofwat actually! Only helpful comments or please don’t bother.

Thanks for pointing that out, I'll corect it.

It's surely helpful to let you know you've got no credible chance of success with your appeal

mmmmikey

KsMan said:

I have just received my new bill and Thames Water are putting my bill up from £23/month to £55/month a 139% increase! I am a metered user and my actual consumption has gone down from the last period soo even with the so called average increase of @40% this appears unjustified . I am a single occupant of a small 2 bed house so it’s a shocking increase. 

I would point out that the unit charges for water and waste have only increased by 29.2% and 31.2% for water and waste but the fixed charges have increased by > 120%. Are they allowed to increase them by this much? The fixed costs are obviously a relatively small part of the total so these new charges just seem wrong.
i am going to appeal this and any helpful pointers on how I should do this would be appreciated 

Before you think about appealing it's worth understanding exactly why your monthly payment has gone up so much. Here are two things to check:

(1) Did your last bill have a balance owing for last year? What you pay each month is based on an estimated use for the year and for all kinds of reasons that can lead to you not paying enough in one year. So if you paid £23/month last year and that wasn't enough you might end up the year owing, say £120 meaning you paid £10 a month too little. So this year, not allowing for increases, you would need to pay £33/month to cover this year's bill plus an extra £10/month to pay off what you owe for last year - a total of £43/month. That would go down to £33/month the following year (again not allowing for price increases). So your "bill" (or more accurately your monthly payment) can vary a significant amount from year to year. Of course, you also have price increases to factor in.

(2) What usage is this year's payment based on / when did you start using less? If you only recently started using less that may not be taken into account yet and you could be paying a higher amount based on higher previous usage.

Hopefully there's enough information here to help you understand what has happened, and/or to help you have an informed discussion with Thames Water.

If you try and appeal to Ofwat without first trying to sort things out with Thames Water they will politely but firmly tell you to **** off, so however strongly you feel about it you do need to make the effort to resolve this with Thames Water in the first instance.