Recently, my housemate, who was the account holder for our Thames Water account, moved out of the property I am currently renting. As a result, someone else moved in. I was informed that I had to close the existing account and open a new one in order to become the new account holder.
At that time, we did not have a water meter, and our previous bill on the old account was £579.99. In order to pay it off over 12 months, we were making monthly payments of £48.33.
However, when we closed the old account and opened a new one, the new bill stated that we would be paying £62.62 a month over six months, amounting to a total bill of £375.57. There was a credit of £37.25 on the account, so I am confused as to why we are now required to pay a much higher monthly amount.
The only change that occurred was the account holder; I am still residing in the same house with the same number of people.
Additionally, we were not notified of any upcoming increases in our previous bills while we had the old account, so the sudden increase is perplexing. Via email
Draining: A reader found that the payment for water increased because of a change in account holder
Helen Kirrane of This is Money responds: Water bills can be perplexing to comprehend. I understand your concern regarding the £15 increase in monthly bills, as it represents nearly a 30% rise compared to your old bills.
Allow me to explain the process of calculating water bills and then address the potential reasons for the significant increase you experienced.
To begin, Thames Water issues an annual bill for each household on April 1st of every year.
For customers without a water meter, bills are typically based on the property’s ‘chargeable value.’ These values are determined by local councils and reflect the estimated rental value of the property.
The chargeable value is then multiplied by the water company’s rate per pound, which represents the amount in pence charged by the supplier for every £1 of the property’s chargeable value.
Separate rates per pound are applicable for both water supply and waste water removal.
In addition, fixed charges are added to cover expenses such as bill production, payment processing, and customer service operations.
Once the bill amount is determined, payment plans are established to ensure that the entire balance is paid off before the next annual bill is issued.
Based on the details provided, it seems that your old account was set up with a 12-month payment plan, allowing you to pay the total bill of £579.99 in 12 installments of £48.33 per month.
A spokesperson from Thames Water explained: If you do not have a water meter, charges are applicable for each day you occupy the property.
These charges are due in advance on April 1st, and you receive the bill prior to this date, covering the charges for the following 12 months.
If you move into the property after April 1st, charges will be payable from the day you move in as specified by us. You can choose to pay the bill in full or through a payment plan.
Why has your water bill increased?
Helen Kirrane of This is Money responds: The bill on your previous account was issued on April 1st, 2023, and covered the period from that date until March 31st, 2024.
However, you closed your account on August 7th, 2023, which was just over five months into the 12-month billing period.
Consequently, a new bill was issued for the period starting from August 8th, 2023, the day after your account was closed, until March 31st, 2024.
Since you did not change your residence, but only the account holder, this bill represents the remaining balance for the period ending on March 31st, 2024, totaling £375.57.
As this bill covers the period until March 31st, 2024, the full balance must be paid by that date. Thames Water clarifies that this is done to ensure no amount is carried forward from the old bill into the next billing period.
You mentioned that your first payment on the new account is scheduled for October 1st, 2023, meaning you will have six payments until the final bill is settled around March 31st, 2024, instead of the 12 payments originally planned.
The reason for the higher monthly payments is that they are now spread over a six-month period instead of 12.
Regarding the £37.25 credit, Thames Water would have returned this amount to the bank account from which the bill payments were made. It is advisable to check whether a payment has been received.
How often can you make payments on your bill?
A spokesperson from Thames Water explains: If you pay by direct debit, you have the option to make monthly, ten-times-a-year, eight-times-a-year, half-yearly, or yearly payments when you receive your bill.
If you do not pay by direct debit, you can make payments on a weekly, fortnightly, monthly, ten-times-a-year, eight-times-a-year, half-yearly, or yearly basis when you receive your bill.
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