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Sarah Rice

Sarah is our insurance specialist, reporting the latest important developments in the industry.

Inflation Causes Water and Sewage Bills to Increase

It has been announced that water and sewage bills are set to increase in line with inflation in 2011.

Water regulator body Ofwat have announced that the average water bill is set to rise by 4.6 per cent from 1st April, 2011.

Across this year and next, water and sewage bills will keep in line with inflation. This adds an extra £16 to the average £356 bill across England and Wales.

More people could now turn to using a water meter as you only pay for what you use. If there are less people living in your house than bedrooms you could save money. For example, two people living in a 4 bed house would save in comparison to a large family.

Households are being urged to consider moving to a water meter that could save them £56 a year according the Ofwat report claims.

"When we set limits on prices, we listened to customers and challenged companies hard,” said Ofwat Chief Executive Officer, Regina Finn.

"That's why average bills are set to remain broadly in line with inflation up until 2015, while companies are investing more than ever before, £22 billion.”

The economic water regulators believe that this increase will benefit almost ten million, as OFWAT protect water supplies from events such as flooding to cleaner rivers and beaches.

Under the current system water companies are allowed to add inflation to the price limits agreed with Ofwat.

It was announced earlier this week that British Gas have seen a 24 per cent increase in profits. Dual fuel British Gas customers are paying 34 per cent more than the average household bill.

British gas hiked prices in December by £44 for gas and £24 for electricity.