Breakdown of bill

Illustration of how customers' money is typically spent

How customers’ money is spent

£1.08
per household per day
43p
People and material
18p
Maintaining our equipment
10p
Building new assets
7p
Energy
9p
Paying taxes, rates and licences
22p
Paying for investment to improve services
Source: Water UK (indicative split between categories based on Final Determinations in 2014 Ofwat Price Review and 2015/16 outturn data)
  • This includes wages for staff at water companies and hiring of other specialists and contractors. Water companies need a very wide range of skills including engineers, scientists, economists and customer service. They need a range of materials and equipment to carry out their job, for example chemicals to treat water laboratory equipment to test water samples to make sure the quality is good.

  • Water companies have many machines, pumps and pipes that they use to treat water, get it flowing to your home and then to also take the sewage away after you flush. These all need to be kept working efficiently so that you can expect the water to flow when you turn on your tap.

  • For example, when new houses are built, they need to be connected to the water and sewerage network with new drinking water and sewer pipes, and new water treatment plants may be needed to ensure that there’s enough water for the new houses.

  • Water companies have a lot of machinery and equipment to keep water flowing, treat so it’s safe to drink, take used water away and treat it before returning it to the environment. Millions of litres water are treated each day and pumped around many thousands of kilometres of pipes to people's homes – and then disposed of safely. This all needs energy to keep working.

  • This includes taxes on profits, rates on buildings and water and wastewater treatment sites, tax on profits and licence fees paid to the Environment Agency.

  • Companies invest large amounts every year to improve services. To spread the cost over time, like a mortgage, companies borrow money from banks and other investors. Companies need to pay interest on the money they have borrowed, and provide a return to investors.

  • Ofwat publishes a report on the details of how companies pay for investment and make sure that their finances can cope with shocks.

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