Insights ¦ Cost of living: wave six

Key Take Aways

1. Despite a slight decline, over half of water bill payers still struggle to pay household bills frequently, highlighting ongoing affordability pressures.

2. Awareness of financial support options for water bills is increasing, now at 34%, with support receipt stabilising at 9%, second only to electricity among utility sectors.

3. Concerns about water bills remain stable at 27%, with the worry about monthly increases also persisting, especially among those struggling financially.

4. The proportion of customers expecting to struggle with utility payments over the next year has decreased slightly but remains significant at 38%.

5. Trust in water companies to deliver value for money has declined, particularly among younger customers, with trust in delivering services like fixing leaks and investing in infrastructure weakening.

6. Customers prioritise good quality drinking water and responsible wastewater management when choosing service providers, with these factors topping decision-making criteria.

7. Physical and mental wellbeing correlates strongly with financial strain; those struggling with bills report higher levels of worry, stress, and depression.

8. The mental health impacts of financial hardship are recognised, with over half of struggling bill payers feeling that mental health issues make managing bills harder.

9. There’s a notable gender and age divide in financial resilience, with younger customers and tenants experiencing higher levels of stress and difficulty.

10. While most customers expect bills to rise, there’s an expectation for water companies to improve service quality and provide better support during financial hardship periods.

11. Concerns about water bills are lower compared to gas and electricity but remain a significant issue, especially given the anticipated rate increases.

12. The report underscores the importance of supportive and accessible financial assistance mechanisms, alongside transparency and value delivery, to restore trust and improve customer wellbeing.

Key Statistics

• 20% of water bill payers currently struggle with their water bill.

• 48% reported struggling to pay household bills ‘sometimes’ or more often over the past year.

• Awareness of water companies’ financial support increased from 28% (autumn 2023) to 34% (October 2024).

• 9% of water bill payers currently receive support, comparable to electricity and gas sectors.

• Trust in water companies to deliver value for money is at 37%, with only 9% strongly trusting.

• 70% of younger respondents (18-34) reported struggling with bills, compared to 56% of those aged 55+.

• Concern about paying a utility bill in the next year is at 38%, down slightly from 42% in previous waves.

• 25% of bill payers are concerned about a £5 monthly increase; this rises to 48% among those struggling with their water bills.

• 60% of customers who trust their water company to ensure good quality drinking water, compared to 17% trust to prevent environmental harm.

• 33% of bill payers feel mental health struggles make it harder to ask for help.

• The mean concern level for water bills is 5.6 out of 10, slightly lower than previous waves.

• 58% of bill payers feel that mental health issues impede seeking assistance with bills.

Key Discussion Points

• The ongoing need to address affordability, with nearly half of households experiencing frequent payment struggles.

• Increasing awareness and stabilisation of financial support for water bills highlight sector efforts but also the necessity for ongoing outreach.

• Trust in water companies is eroding, especially among younger customers, requiring sector actions to rebuild confidence.

• Customer prioritisation centres on service quality and environmental responsibility, shaping future service delivery strategies.

• The persistent gap in wellbeing indicates a strong link between financial hardship and mental health, necessitating cross-sector collaboration.

• The report signals a likely increase in customer expectations for improved service and financial assistance amid bill rises.

• The potential impact of monthly bill increases on household financial stability is significant, especially for vulnerable groups.

• The importance of transparent communication during economic pressures to mitigate negative emotional and financial consequences.

• Age and tenancy status influence financial resilience and trust levels, demanding targeted engagement.

• The role of sector regulation and oversight in ensuring fair, accessible financial support mechanisms.

• The necessity for utility providers to demonstrate value and responsible investment to restore public confidence.

• The report delves into how consumer behaviour adapts in response to financial stress, affecting spending, borrowing, and mental health.

Document Description

This article examines the latest findings from Ofwat’s sixth wave of a comprehensive survey into water customers’ experiences amid rising living costs across England and Wales. It offers insights into affordability challenges, customer trust, awareness and take-up of financial support, behavioural responses to financial strain, and the intertwined impact on mental wellbeing. The report highlights areas for sector improvement and regulatory focus, especially as households face increased bills and seek reassurance of value for money and financial support options. It serves as a strategic resource for senior managers aiming to understand customer resilience, trust dynamics, and support mechanisms within the water sector.