Millions of water customers are to receive discounts on their water bills over the next two years the industry regulator has announced.

Water companies will be paying out a net total of £70million to customers after falling short of performance targets the regulator Ofwat has confirmed today. The fines for underperforming suppliers will be passed onto customers through lower bills across 2024 and 2025. However, the sum is far lower than the £114million figure it had provisionally set in September.

The regulator judges the performance of water companies in England and Wales each year against the "stretching" targets they set in 2019 for a five-year period until 2025. This fine comes as most companies failed to meet key targets on reducing pollution, leakages and supply interruptions.

Thames Water will be ordered to pay out the most to its 15 million customer base, of nearly £74 million. Just last month the watchdog said Thames Water has “significant issues to address” over its financial strength. Anglian Water customers will see more than £27million taken off their bills and customers of Dwr Cymru will have around £24million.

However, it's not good news for everyone as some water companies are able to charge customers more after meeting their goals. Severn Trent Water will be allowed to add £89million to the bills of the 4.6 million customers it serves from next year and United Utilities can charge more than £25million. Households covered by Wessex Water, South Staffs Water and Portsmouth Water also face slight increases to their bills.

Water bills usually rise annually from April each year and the discount will be included in bills for the 2024/25 year. The exact amount the discount will be worth will depend on how many customers each supplier has, plus how much bills are set to rise or fall next year.

This can depend on your particular water company and a number of factors at the time, including inflation. Currently, the average combined water bill stands at £448 a year.

Full list of water companies returning money

  • Northumbrian Water - £100,000

  • Hafren Dyfrdwy - £400,000

  • South West Water (South West area) - £800,000

  • SES Water - £1.1million

  • South East Water - £5.1million

  • Affinity Water - -£8million

  • South West Water (Bristol area) - £9.2million

  • Yorkshire Water - £19.8million

  • Southern Water - £21.4million

  • Dŵr Cymru - £24million

  • Anglian Water - £27million

  • Thames Water - £73.7million

Water companies potentially adding to bills

  • Severn Trent Water - +£88.6million
  • United Utilities - +£25million
  • Wessex Water - +£7.9million
  • Portsmouth Water - +£3million
  • South Staffs Water - +£800,000