Customers to receive up to £2000 for water service failures
Source: gov.uk (2025-07-02)

Uplifts to Guaranteed Service Standard Scheme will result in up to tenfold increase for customer compensation when they've been failed by water companies

- Increase to water company reimbursements put more money back into customers’ pockets when their services are hit
- Triggers for compensation to be expanded to include company failure to conduct meter readings and installations
- One of Environment Secretary’s first promises in office delivered as government rolls out plan to reform the water sector
Water companies will increase compensation payments to customers up to tenfold from today (2 July), ensuring that the public are more fairly reimbursed for supply issues and low standards of service.

Customers will automatically receive more money for issues such as continued low water pressure and cancelled appointments.

A key step in the government’s mission to reform the water sector, the move marks the first uplift in compensation rates in 25 years, with the government recognising the urgent need to bring payments in line with inflation and properly compensate households for poor service.

Severe issues such as flooding will see customer compensation double from £1,000 to up to £2,000, while households suffering consistent low water pressure will be automatically eligible to receive up to £250 – a huge uplift from the previous compensation rate of just £25.

From today, no action will be needed from eligible customers as payments will automatically be credited back to their accounts.

Environment Secretary Steve Reed said:

Too many water companies are letting down their customers – with leaking pipes, poor water supply and low water pressure.

The Government is holding water companies to account by making them put money back into people’s pockets when they fail their customers.

The government is also working with water companies to expand the list of circumstances that will trigger compensation payments. Compensation for when customers are asked to boil their water due to contaminated supply will come into force later this year.

The standards, outlined in the Guaranteed Standards Scheme, set out a baseline for customer service in the water sector. They include providing timely restoration of water supply following an interruption, responding to written complaints and managing the risk of sewer flooding.

This comes as part of the government’s action to cut sewage spills and attract investment in the sector, including:
- Strengthening regulation to ensure polluting water bosses who cover up their crimes now face two-year prison sentences.
- Banning unfair bonuses for bosses of six polluting water companies.
- Launching a record 81 criminal investigations into sewage pollution.
- Securing £104bn in private sector investment to upgrade crumbling sewage pipes and cut sewage by nearly half by 2030.
- Launching the Independent Water Commission led by Sir John Cunliffe to modernise the water industry and work with companies and their investors to make the industry one of growth and opportunity.
Mike Keil, Chief Executive of the Consumer Council for Water (CCW), said:

Customers expect to be treated fairly when their water company lets them down, so we’re delighted the Government has moved at pace to strengthen service standards.”

This should give people peace of mind they now have far stronger protection from a much broader range of water company service failures - from the slow installation of water meters to the mishandling of debt recovery. As well as bolstering payments for thousands of customers, these changes mark an important step towards restoring trust in the water sector which is at an all-time low.

David Black, Chief Executive of Ofwat said:

We welcome these improvements to guaranteed standards and payments for customers.

When customers suffer from problems like low pressure, disruptions to supply or sewer flooding they can experience major stress and inconvenience, and payment amounts must recognise the disruption to their lives when standards are not met.

These new changes are another way to make sure customers are protected when companies get it wrong.

Annex A

Summary of updates to payment levels for existing standards:

Figure 1 –Repeat Sewer Flooding payment bands

Summary of new standards