Business water tariffs are up 21%. Here’s what to do about it

BFFF Energy Services
Jun 30
3 min read

If you’ve been too busy to review your business water contract recently, you’re not alone. But you may also be in for a surprise.

From April 2025, default water tariffs rose by an average of 21% across the UK, with some regions seeing hikes of up to 41%. These aren’t minor adjustments. For all frozen food businesses, the impact can run into thousands of pounds in additional annual cost just for doing nothing.

And that’s the issue. Most businesses haven’t done anything.

70% of businesses still haven’t switched

The business water market deregulated in 2017, opening the door for companies in England to choose their water retailer, much like they can with energy suppliers. But the majority haven’t taken up that option. Estimates suggest more than 70% of businesses remain on their default tariff, often without even knowing it.

In practical terms, that means they’re paying rates that might no longer reflect their actual usage, business size, or operating needs. And now, those rates have gone up sharply.

Water: still treated like an afterthought

Energy bills tend to get attention. Water bills don’t.

They’re usually smaller, harder to interpret, and more likely to be bundled in with broader facilities or finance admin. But in an environment where utility costs are only going in one direction and buyers are scrutinising every aspect of the supply chain, that blind spot is starting to look expensive.

More importantly, it’s avoidable.

What is a default tariff?

Default tariffs are the standard rates set by your water retailer for businesses that haven’t negotiated a contract or switched supplier. Ofwat sets price caps for these, but retailers still have room to set their own structures within those limits.

In 2024, many of those caps were revised upwards.

Southern Water area: up by 41%
Thames Water: up 29%
Northumbrian: 17% increase
South West: 24% increase
Scotland: 10% increase

These rises are partly to fund infrastructure upgrades and a £1.5 billion push for smart metering but for your business, it simply means higher bills unless you act.

So... is your current water deal still working for you?

Here are some signs your contract may need attention:

You don’t know whether you’re on a default tariff
You’ve never switched water supplier
Your usage or operations have changed but your tariff hasn’t
Bills seem higher this year, but you haven’t investigated why
You’ve never had a water audit

Even if your business isn’t on a default tariff, you might still be paying more than you need to, or missing out on useful services, like usage monitoring or leak detection.

What you can do

You don’t need to become a water procurement expert overnight. But a few simple steps can make a big difference:

Check your current supplier and tariff. Are you on a default rate?
Review your usage data. Look for spikes, patterns, or anomalies
Request a water audit. This can highlight inefficiencies and billing errors
Compare supplier offerings e.g. fixed rates, smart metering, customer support
Get advice. If it’s not clear what your next step is, ask for help

A water audit doesn’t lock you into any decisions. It just gives you a clearer picture, which is more than many businesses currently have.

Staying reactive is starting to cost more

Staying on a default tariff was once seen as a safe, low-effort choice. But as prices rise and scrutiny from buyers grows, that inaction could be costing you more than you realise, both financially and reputationally.

Taking a proactive step now could not only save money but also show that you’re in control of your wider utility profile, something increasingly important in ESG and procurement conversations.