Water rates in the UK: how to lower your water bill
No matter how much water you consume for your home or business, there are still many ways for you to reduce your water rates. In this guide, we cover how water rates are calculated in the UK and how to pay your water rates so that you can discover how to save money on your bills.
How are water rates calculated?
Water rates in the UK will vary according to the region you live in. Some of the larger cities in the country are divided into further subcategories that are charged different water rates. Even people living on the same street can find themselves in two separate regions and therefore have different water rates!
Regardless of where you live, there are common factors that contribute to the cost of your water bill. Here are the main items a water supplier takes into account to calculate your water rates:
- Water treatment - Treatment costs are not the same throughout the country. Each region has different water sources. Therefore, each region has different acidity levels, quantity of bacterias, minerals, etc. to deal with to convert the source into potable water for your home.
- Transportation - This involves all of the aqueducts required to transport the water to and from your home. Take into account all the sewage which takes your home's wastewater (toilet, sink, laundry, rainwater from the roads, etc.) back to the water treatment plant before being released back into the environment.
- Maintenance - This concerns all of the repair and upgrade work these aqueducts and the treatment plants themselves require.
- Standing charges - Much like with any utility bill for your home, such as energy or broadband bills, standing charges are there to cover the fixed costs. These costs include having a customer service team, an accounting department to look after your water bill, water rates and many other things.
A concrete example. The city of London needs to treat its water more for desalination as it receives salt water from the Thames estuary. By contrast, the Midlands, having more pasture lands, would need to treat their water more for bacteria and sludge (coming from cow and sheep excrements)
How much are water rates?
How much your water rates are will depend on two things: where you live and the type of water meter you have, whether that be metered or unmetered.
Unlike your energy or gas supplier, you cannot switch water suppliers for your home in the UK. It is a monopoly and you are stuck with the supplier in your region, thus limiting your options.
However, in most homes, you can choose between a metered water rate or an unmetered water rate. Having one or the other for your home could result in significant savings on your water bill.
Anyone can request to have a water meter installed and therefore opt on the metered water rates. Not everyone can be on an unmetered water rate.
Did you know? If your home does not have the right pipework or is a shared system, your supplier may not be able to install a water meter and you will have to be on an unmetered rate.
What is a metered water rate?
A metered water rate is very similar to what you would have for your electricity and gas usage. A meter is installed that measures how much water you consume and you pay just for what you use (and any standing charges your supplier may have).
Pros of metered water rates
- Pay only for what you use - This is good if you are a cautious water user or if you are away from home often and not using much water.
- Free installation - Your provider can install one at no extra cost (except in Scotland where residents may have to pay as much as £300 for installation – sorry!)
- Available for tenants - If you are renting a property, you can get a water meter installed without seeking permission from the landlord. However, we would always recommend doing so first in order to avoid any misunderstandings with your landlord.
Cons of metered water rates
- Submit meter readings – You will have to regularly check and advise your provider what your usage has been. This can sometimes lead to disputes or discrepancies between both parties.
- Costly – In some cases, the water rates on a metered home can result in being higher. Imagine you have some leaks in the piping or slightly running toilets – all that extra water loss will now have to be paid for.
- Location – You do not choose the location of the meter. Your water supplier will send an engineer to inspect your home and they will decide where your water meter will be installed. Requesting a specific location may come at an extra cost.
Did you know The reason Scotland is treated differently from the rest of the UK is because they have a different water regulator. England's water is regulated by Ofwat. Scotlands’ water is regulated by the Water Industry Commission for Scotland (WICS).
What is an unmetered water rate?
An unmetered water rate is the opposite of a metered water rate. With an unmetered water rate, it doesn't matter how much or how little water you use. Your water bill is based on the value of your home rather than your usage. This makes it ideal for large families, undervalued homes, and high water consumption households.
Pros of unmetered water rates
- Fixed amount – You know exactly how much you will be paying each month regardless of how much you use. This makes it easier to manage your monthly utility bills.
- Unlimited usage – Left in a rush this morning and kept the tap on? ‘Oopsie!’ is the worst of the consequences under an unmetered water rate.
- Convenient – It is not required to submit meter readings and is therefore easier to manage. This means you have one less thing to worry about.
Cons of unmetered water rates
- Fixed amount – If you are a conscious user and keep your water usage to a minimum, you’ll end up paying for more than you consume. An unmetered water rate may be frustrating as your wallet does not reap the benefits from your efforts.
- Estimated cost - Your bill is based on an estimated usage for your home. Again, if you are a low user, you may be paying more than necessary.
- Higher water rates - To ensure the cost of your water supply is covered, your supplier may charge you higher water rates compared to a metered water rate.
See our average water bill guide (coming soon!) for more details on the exact costs of your water bill.
How to pay your water rates
Now we understand that according to where you live and the type of water meter you have, your water rate will vary. So paying for your water bill should be straightforward then, right? Wrong!
Do water rates payments offer two months free?
My neighbour receives two months free water with an unmetered water rate, that alone should make an unmetered water rate preferable, no?
You can pay your water bills for 10 months rather than 12. Some suppliers will even offer the option to pay only eight months, therefore receiving four months ‘free’ water. But, you can remove the word ‘free’ from your neighbours’ statement.
Water suppliers assess your water usage for the year based on set criteria. You then have the choice to pay that yearly total amount at once, monthly or over eight to 10 months. But the total yearly cost will be the same. Unfortunately, there are no free months for your water supply.
What months do you not pay water rates?
Should you choose to pay for your water over an 8 or 10-month period, which months you do not have to pay your water rates will vary according to your water supplier.
Generally speaking, most water suppliers in the UK will offer you the months of March and April as a non-payment option.
How often do you pay water rates?
As discussed in the previous section, you have the choice to pay just once a year or as often as bi-weekly. Much like with your energy bills, setting up a direct debit is often the easiest way to ensure you don't fall behind on your payments.
Some water companies such as Thames Water let you set this up online, while with others like Scottish Water calling ahead may be a better option. Many people prefer to set up an online account with their supplier and easily see everything about their water rates online.
To know how often you pay water rates, the first thing you need to do is register with your local water supplier and inquire what payment options they offer. You can change your payment frequency preference at any time. Registering with your water supplier should have been done when you first moved into the property.
If you haven't done so already, you will also need to register for your electricity and gas bills. Some home service providers can register all of these for you all at once.
Important note If you are renting a property, it is common for your landlord to include the water rates into your rent. If this is the case, you can always contact the Citizens Advice Bureau to calculate and ensure you are not being overcharged for your water usage.
Is a water meter cheaper than water rates?
Like most items in your home, this will depend on your usage. If you are a conscious and careful water user, you will want to contact your local water supplier and inquire about metered water rates. Most suppliers will offer a water rates calculator for you to evaluate your personal situation.
- Good news! You’ve decided to make the switch to a metered water rate and, after a few months, you realize this isn't the best option for you. You have the first year to request your supplier to return to an unmetered water rate. No penalties, no meter change, no questions asked.
- Bad news! If you move to a home that already has a metered water rate, you are stuck with it. There is no change to an unmetered water rate. Thus the importance of ensuring this is the best option for you before making the change.
Business water rates
So far, we have focused our attention on residential water rates, but what about business water rates?
The first important thing to know is that businesses, contrary to residential properties, can switch water suppliers under certain conditions to obtain the best water rate. Charitable organizations, churches, and schools qualify for business water rates.
Since 2017, business water rates have been deregulated in the UK so that large and small businesses can now choose their water supplier.
How to compare business water rates
Much like the residential water rates, businesses will have the option between metered or unmetered water rates. See the above section for the difference between the two.
On top of that, you will need to determine whether your business is considered a small, medium, or high water volume water user.
For an easy comparison, the usage difference between a local hairdresser and the Coca-Cola bottling company is quite different. Consequently, the business water rates available will therefore vary accordingly to those businesses' usage.
Today there are 25 business water retailers businesses can choose from in the UK. See our business water retailer guide (coming soon!)
Did you know Prior to the 2017 opening of the water rates market, only businesses consuming over 50 megaliters were able to choose their water supplier.
Business water rates in Scotland
As with residential rates, businesses in Scotland are treated differently than the rest of the UK. This is simply because the water regulator is different in England, Scotland, and Northern Ireland.
Scottish businesses will be happy to know that the water supply and business water rates have been deregulated since 2008. Interestingly, it is the success of the open water market in Scotland that prompted the UK and Northern Ireland to follow suit in 2017.
Warning If you are switching water suppliers, ensure they are licensed by the Water Industry Commission for Scotland (WICS).
What is the average water rate for small businesses?
Prices differ vastly between business water suppliers in the UK. Based on the average consumption of 200m3 for a small business, your water pricing can range from £485 to £1,078 total. The difference between the cheapest water supplier and the most expensive is a whopping £590!
If this is the average water rate for a small business, imagine the savings available to you if you have a medium or large business!
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*Of customers who made a saving on a three-year business energy contract when switching through our trusted partner Bionic, the average amount saved was £1,305. Based on data between January 2020 and May 2020.
So whether you are a homeowner, renting, or a business owner, plenty of savings can be had on your water bill. Following the necessary steps laid out above and doing the proper research is definitely worthwhile.