After 25 years of stagnant standards, the government has finally stepped in to raise the bar on water service compensation. And for once, it’s good news for households.
From today (2 July 2025), eligible customers in England could automatically receive up to £2,000 if their water company fails to deliver. That’s a tenfold increase from previous rates – and a long time coming.
Why this matters
Let’s be honest: water companies haven’t had the best track record. From leaking pipes to sewage spills, low pressure to no supply at all – households have put up with poor service for far too long.
And the public is rightly angry. While bills go up and bosses pocket bonuses, our rivers, lakes and coasts are left polluted and neglected.
The government’s announcement is part of a wider crackdown. It aims to make water companies take real responsibility for their failings – and crucially, put money back in customers’ pockets when things go wrong.
What’s changing?
Here’s what the new compensation rules mean for you:
- Flooding issues – payouts can now reach up to £2,000 (previously capped at £1,000).
- Low water pressure – now eligible for up to £250 (up from £25).
Payments will automatically be credited to the accounts of eligible customers with immediate effect. And it doesn’t stop there. More improvements are coming, with an expanded list circumstances that would trigger compensation payments in the pipeline.
For example, if you’re told to boil your water due to contamination, new compensation rules will apply later this year.
This shift brings compensation in line with inflation – but more importantly, it signals a tougher stance on poor service.
A step in the right direction
Mike Keil of the Consumer Council for Water called the move “an important step towards restoring trust in the water sector.” And it’s about time. Trust is at rock bottom – and it’s going to take more than promises to fix that.
The regulator Ofwat is also backing the changes, recognising that service failures cause real stress and disruption to people’s lives. Payment levels should reflect that – and now, they’re starting to.
What else is being done?
Alongside the compensation increase, the government has also:
- Banned bonuses for bosses at six polluting water firms
- Introduced jail time (up to two years) for execs who cover up pollution
- Launched 81 criminal investigations into sewage-related offences
All of this points to a sector finally being held to account.
Our view
At Join the Claim, we’re here to shine a light on situations just like this – where consumers deserve better. So while it’s encouraging to see water firms being made to pay out, we’ll be watching closely to make sure the changes stick.
Check if you’re owed money
The water sector isn’t the only one letting people down. Head to our live claims page to see if you’re eligible to join a group action and get the compensation you deserve.
