Yorkshire Water and Thames Water customers could benefit from lower bills under proposed adjustments linked to their suppliers’ performance. The Guardian, citing estimates from Ofwat, reports that the proposals would return £107 million to customers through lower bills in 2027–28. However, no final decision has been made, and the adjustments would not guarantee a fall in every household’s total bill.
Ofwat, the water industry regulator for England and Wales, assesses companies against agreed targets. Under its outcome delivery incentive system, failing to meet commitments can trigger financial adjustments in customers’ favour. The mechanism also works in reverse: companies can receive additional revenue for meeting targets, increasing customers’ bills.
Reductions for Yorkshire and Thames, increases elsewhere
According to the estimates reported by The Guardian, the adjustment could reduce the average Yorkshire Water customer’s bill by £27 and the average Thames Water customer’s bill by £7. Under the proposed settlement for performance in 2025–26, the companies would return £75.1 million and £45.8 million respectively. Other suppliers facing repayments include Dŵr Cymru at £16.7 million, South West Water at £16 million and United Utilities at £13.4 million.
Not all customers would benefit from the settlement. Severn Trent is set to receive £41.8 million for meeting targets, while Northumbrian Water would receive £35.9 million. The estimated effect of those adjustments would be an £8 increase in the average Severn Trent customer’s bill and a £21 increase for Northumbrian Water customers.
These figures do not mean every household would see the same change. The effect depends on the supplier and customer type. Crucially, even an adjustment that reduces the amount charged does not guarantee a lower final bill than before: other tariff changes also affect the total.
Final decision expected by December
According to The Guardian’s report, published on 14 October 2026, Ofwat is due to make its final decision by 15 December 2026, with the adjustments applied to bills from 1 April 2027. Until then, both the amounts and their estimated impact on customers remain proposals.
The newspaper reports a projected net adjustment of £240 million across the sector for performance in 2025–26. That should not be confused with the £107 million expected to be reflected in lower bills in 2027–28. Thames Water said Ofwat had agreed to defer some of its adjustments by a year. According to the company, this does not mean they have been cancelled or reduced.
