Watchdogs chart water poverty and debt collection experiences

(by Karma Loveday)

Around 1.8m households in England and Wales (6.8%) are in water poverty – spending more than 5% of income after housing costs on water services – according to research by the University of York for the Consumer Council for Water (CCW) using 2024/25 national household survey data. Bills for this group exceeded the affordability threshold by a median of around £337 per year.

Affordability challenges are not evenly distributed across England and Wales. The study also found higher levels of water poverty among people from ethnic minority communities; single working-age adults; and single parents. In addition, customers in water bill debt were more than twice as likely to be experiencing water poverty as others.

CCW plans to use the results as a baseline to track water poverty levels in future years – to see what impact bill rises are having and the extent to which increased support from water companies is helping to alleviate affordability concerns.

Andy White, senior lead for social policy, said: "Water companies in England made a public commitment to end water poverty by 2030 and they have been increasing the support available for cash-strapped households. However our study shows that many people are still struggling and we know over 4m households are also in debt to their water company. We are concerned that the existing system of support will not keep pace with the impact of steep rises in water bills. We remain convinced that a national social tariff scheme is urgently needed to provide fairer and more consistent support to those who need it most."

Meanwhile, Consumer Scotland has identified measures to improve water debt collection practices in Scotland, after conducting targeted, deep dive research into the experiences of those who have been in water debt and subject to water debt collection.

In Scotland, domestic charges are collected through the Council Tax system rather than billed directly by Scottish Water, and charges are based on Council Tax band rather than water use.

The research found only a minority of participants were able to engage early with their local authority and agree a repayment plan. More commonly, local authorities passed debt cases to external debt collection agencies or sheriff officers, often with no notification. That meant consumers experienced summary warrants and enforcement action, such as debt collector visits. 

Participants described communication as unclear and often overly legalistic, and they experienced feelings of stress, shame and embarrassment, which in some cases prevented them from seeking help.

Consumer Scotland called for:

• Earlier and more supportive engagement with consumers experiencing payment difficulties.

• Early affordability assessments before debt recovery action is taken and adjustments when household income changes.

• Greater flexibility in repayment arrangements based on ability to pay.

• Reviews of debt recovery processes to reduce unnecessary escalation.

• Enhanced training for council and debt recovery staff to support clear, empathetic communication.

• Improved access to money and debt advice. 

Previous research found around one in five Scottish households were in water debt, with low-income households disproportionately affected.