London Evening Standard/London

Households in London are to face the biggest increase in water bills in Britain this year, with rates rising by more than double the rate of inflation to an average £354.

Thames Water, which supplies 14mn homes in the capital and Thames Valley, can put up water and sewerage bills by 5.5% from April 1, industry regulator Ofwat said.

Customers cannot choose their supplier so Ofwat tells firms how much they can raise prices.

Its decision means that households in the capital will see their average bill rise by £18.

The average salary in the UK went up by less than 2% last year.

Further rises could be on the horizon: Thames Water warned in October that bills were likely to increase by as much as £80 a year to help pay for the “supersewer”.

This year’s rise for Thames Water bills compares with a national average increase of 3.5%, or £13.

Ofwat said the rise was needed to pay for a £25bn investment programme to improve 140 water treatment works and 4,440 sewage treatment plants, plus work on 10,000kms of mains water.

Regina Finn, Ofwat’s chief executive, said: “We understand that there is huge pressure on household incomes and any rise is unwelcome. Inflation is driving these increases.

“These rises will help pay for investment of around £1,000 for every household in England and Wales. This will deliver real benefits — from continuing to improve the reliability of supplies to dealing with the misery of sewer flooding for thousands of customers.”

Thames Water reported a pre-tax profit of £112.6mn for the six months to October.

Dame Yve Buckland, chairwoman of the Consumer Council for Water, said: “Water companies are making higher profits than expected and they need to give some of this back to their customers. They can limit their own prices or invest more money into services — they shouldn’t keep it all for shareholders and investors.”

The latest water bill increase, on top of a wave of energy price rises from Britain’s big six suppliers, means households now face spending a record £1,740 a year on water, sewerage and energy alone, according to comparison site Uswitch.

Families now need to find an extra £107 a year for essential bills. Ann Robinson, of uSwitch, said: “With incomes remaining stagnant, this will be another squeeze on family finances and will no doubt cause sacrifice and hardship for many.”

Charity National Debtline warned it took a record number of calls for help with water debts last year. In 2003 it only took 597 calls from Britons needing help on water debts. Last year, that figure had reached 19,667.