Water companies in England and Wales could have to return £107m to customers through lower bills after missing performance targets.

Ofwat said Yorkshire Water and Thames Water must return £75.1m and £45.8m respectively for failures in 2025-26. The regulator estimates average bills could fall by £27 for Yorkshire customers and £7 for Thames customers.

Other firms facing payments to customers include Welsh Water, South West Water and United Utilities. But bills could rise where providers met their targets: Ofwat said Northumbrian Water customers could pay an average of £21 more, while Severn Trent customers could pay £8 more a year.

The regulator uses payments and penalties tied to agreed targets because customers cannot switch water provider. Across the industry, bill cuts for 2025-26 failures are expected to total a net £240m.