Insights ¦ Water Single Social Tariff Report

Key Take Aways

1. A significant proportion of older adults on low incomes in England and Wales are experiencing water poverty, with current estimates around 750,000 pensioner households, rising potentially to 1 million by 2029/30.
2. There is broad public support (over 70%) in both England and Wales for introducing a single, standardised social tariff for water bills to address regional disparities.
3. Existing social tariffs are inconsistent across water companies, creating a postcode lottery that limits awareness and uptake among those in need.
4. A centrally coordinated, single social tariff could end the postcode lottery, offering fairness and consistency in affordability support.
5. Four distinct tariff models were modelled, each capable of lifting significant numbers of pensioners out of water poverty, with variations in design and cost implications.
6. Support for a flat-rate fixed bill reduction, percentage discounts, bill caps, and free water blocks ranged from around 67% to 75% among older participants.
7. Eligibility criteria for a single social tariff should incorporate a mix of household income, water poverty levels, and means-tested benefits; a multi-criteria approach ensures coverage for the most vulnerable.
8. There is concern that support tied solely to water poverty definitions risks missing those who self-ration water to dangerous levels, highlighting the need for inclusive criteria.
9. Tiered discounts are viewed favourably, allowing support levels to be balanced against sustainability and fairness.
10. A proactive, automated approach, with data sharing, could be key to increasing uptake of social tariffs.
11. Funding mechanisms for a single social tariff should consider potential adverse effects on non-eligible households and explore diverse sources, including cross-subsidies.
12. The report underscores the importance of a comprehensive, collaborative process involving government, regulators, water companies, and community groups to effectively implement support mechanisms.

Key Statistics

• Nearly 750,000 pensioner households in water poverty in 2022/23, forecasted to rise to approximately 992,058 by 2029/30.
• 73% of older people in England and 72% in Wales support a single, standardised social tariff.
• Average combined water and sewerage bills expected to increase by £94 (21%) by 2029/30.
• 66% of older people on low income in England and 63% in Wales find managing a 20% rise in water bills very or fairly difficult.
• 86% support using a household income threshold (England: 81%, Wales: 80%) as eligibility for a social tariff.
• 67% in England and 62% in Wales support including water poverty thresholds in eligibility criteria.
• Four models of tariffs were evaluated, with potential costs ranging from £165 million (fixed reduction) to over £393 million (bill cap) annually in 2029/30.

Key Discussion Points

• Current water affordability schemes are uneven, with wide regional disparities and low awareness, leading to unequal access to support.
• Water poverty among older adults is projected to worsen, particularly as bills rise and incomes remain precarious.
• Broad support exists for a single, nationwide support scheme that would standardise eligibility and reduce administrative complexity.
• Diverse tariff formats, including fixed discounts, percentage reductions, caps, and free water blocks, could be effective; no single approach is definitively preferred.
• Eligibility criteria should be a combination of income, water poverty levels, and benefits, to ensure support reaches the most vulnerable without creating ‘cliffs’.
• Tiered discounts are supported as they provide flexible, fair support aligned with circumstances.
• Support mechanisms should be automated and integrated with data sharing to maximise uptake and reduce administrative burden.
• Funding options for a national social tariff must balance sustainability with fairness; cross-subsidies are a potential, yet complex, funding source.
• The current regulatory framework should evolve, with regulators and government encouraged to promote more ambitious efforts to eradicate water poverty.
• The overarching goal is to ensure water affordability support is equitable, transparent, and accessible, especially for those most at risk of water poverty.
• Cross-sector collaboration and ongoing modelling are essential to design a scheme that is both financially sustainable and socially equitable.

Document Description

This article is a comprehensive analysis of the potential for establishing a single, nationwide social tariff for water bills in England and Wales, with a specific focus on addressing water poverty among older adults on low incomes. It includes detailed modelling, public opinion polling, and diverse tariff options, providing insights into eligibility criteria, implementation challenges, and funding mechanisms. The report underscores the importance of fairness, consistency, and proactive support in tackling water affordability issues in a vulnerable demographic. It serves as a policy roadmap for regulators, government, and water providers committed to eradicating water poverty and ensuring dignified living standards for older populations.