Hundreds of thousands of Thames Water customers may be unable to pay bills from April

More than half a million “vulnerable” Thames Water customers could struggle to pay their bill this year when they are due to go up by as much as 12.4%, according to a new study.

In total 586,512 households within the catchment are of Britain’s biggest supplier are at risk of defaulting on their bills, concludes the research from data science firm Outra.

Many of those who may not be able to pay include people struggling with long-term illness, health condition or disabilities,

The figure means that Thames may find it difficult to collect as much as £276 million in bills during the year from April at a time when its own finances are under strain.

Bills for an unmetered household paying full charges are due to rise from an average £509 to £571 on April 1, a rise of just over 12%. But for those on social tarrifs the rise will be less steep, averaging only 3.3%.

However Thames is reportedly lobbying regulator Ofwat to be able to charge more to avoid having to be bailed out by the taxpayer.

But Outra said any increase in bills will make it harder for households already only just managing to pay.

Outra’s chief data and technology officer Peter Jackson, who was previously chief data officer at Southern Water and The Pensions Regulator, said: ‘As we enter the new financial year in April and bill increases begin to bite for households that may already be struggling, companies need to be aware there are an increasing number of requirements from regulators including Ofwat and the FCA that mean they have greater responsibility towards vulnerable households.”

“While households face significant penalties for not paying their water bill, it is illegal for water companies to disconnect the supply to domestic customers. This means it will be water companies who suffer the brunt of unpaid bills, over gas or electric companies, because those under financial strain may choose to delay paying their water bill in the knowledge that are not at risk of having their supply cut.”

Two months ago, Ofwat set out new rules for water companies to follow to ensure customers who need extra help are provided with the level of service they require. Ofwat’s ‘vulnerability guidance’ included requirements to develop strategies to provide extra support for vulnerable customers that would “provide a high standard of service and support for vulnerable customers” as well as to “identify customers who need extra help”.