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Why has my Thames Water bill been hiked by 30% overnight?


Why has my Thames Water bill been hiked by 30% overnight?

My housemate, who was the account holder on our Thames Water account, moved out of the property I am renting and someone else moved in. I was told I had to close the account and open a new one to become the new account holder.

We don’t have a water meter, and the bill issued on our old account was £579.99 which we were on a plan to pay off over 12 months, so we paid £48.33 a month.

But when we closed the account and opened a new one, the new bill said we would be paying £62.62 a month over six months, or a total bill of £375.57. There was credit of £37.25 on the account, so I’m not sure why we are due to pay so much more per month.

The only thing that has changed is the account holder, I am still living in the same house and with the same number of people. 

When we had our old account I had not been alerted that our bills were due to go up in the coming months, so where has it come from? Via email

Draining: A reader found that the paynebt for water was due to go up to £62 a month from £48 a month because the account holder changed

Helen Kirrane of This is Money replies: Water bills are fiendishly hard to get your head around. I can see why £15 jump in monthly bills would raise the alarm though, as it is just shy of 30 per cent more a month than your old bills.

I will explain how water bills are calculated, and then come on to why yours might have gone up so much. 

The first thing to understand is that Thames Water produces an annual bill for each household on 1 April every year.

For customers who do not have a water meter, bills are usually based on something called the ‘chargeable value’. These figures were created by local councils and are based on their assessment of how much a property could be let for. 

The chargeable value is then multiplied by the water company’s rate per pound. This is the amount in pence that the supplier charges customers for water, for each £1 of their property’s chargeable value. 

There’s one rate per pound for supplying water, and another for removing waste water.

There are also fixed charges on top, which cover the cost of things like producing bills, taking payments and operating a customer helpline.  

Once the bill amount is decided, payment plans are managed so that the full balance is cleared before the next annual bill is produced.

By the sounds of it, on your old account you were set up on a 12-month payment plan – paying the whole bill of £579.99 over 12 installments coming to £48.33 a month.

A spokesperson from Thames Water replies: If you don’t have a water meter, charges apply for each day that you occupy your property. 

The payment is due in advance on 1 April and we will bill you before this date for the charges that apply for the following 12 months.

If you have moved into your property after 1 April, charges will be payable on a day we advise. You can pay your bill in full or split across the year in a payment plan.

Why has your water bill gone up?

Helen Kirrane of This is Money replies: The bill on your old account would have been produced on 1 April 2023 and cover the period from then until 31 March 2024.

But you closed your account on 7 August 2023, just over five months into the 12 months on the bill period.

So, a new bill would have been produced for the period 8 August 2023, the day after you closed your account, to 31 March 2024.

As you have not moved house, just changed the account holder, this is the remainder of the bill for the period ending 31 March 2024, making up £375.57.

As this bill runs until 31 March 2024, the balance needs to be paid in full by this date. Thames Water says this is so that no amount is carried forward into the next billing period from the old bill.

You told me your first payment on the new account is due to take place on 1 October 2023, so this means you will have six payments until the final bill is paid around 31 March 2024, rather than the 12 from the original bill.

The reason you are paying more each month is because the payments are spread out over six months instead of 12.

As for the £37.25 credit, this will have been returned to the bank account the bill payments were taken from by Thames Water, so do check for a payment.

How frequently can you make payments on your bill?

A spokesperson from Thames Water says: If you are paying by direct debit, your payment options are monthly, ten times a year, eight times a year, half yearly or once a year when you receive your bill.

If you are not paying by direct debit, you can pay your bill weekly, fortnightly, monthly, ten times a year, eight times a year, half yearly or once a year when you receive your bill.

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