A THIRD of your water bill goes through the spout!

More than a third of water bills are being spent on servicing debts and paying dividends rather than fixing leaks and ending the sewage scandal, figures from The Mail on Sunday show.

Activists say an average of 35p of every pound customers pay for their water goes to interest payments and shareholder payouts, according to research from the University of Greenwich.

The worst offender among the ten water and sewerage suppliers is Wessex Water, which has almost 3 million customers across south-west England.

Nearly half of their household bills are spent on debt and dividend costs.

The news comes after customers were left confused by regulator Ofwat’s decision to hit them with bill increases of up to 53 percent over the next five years. It means the average household will see their bills rise by £86 next year – before the impact of inflation, which stands at 2.6 per cent.

Ofwat claims the extra money will be used to fund investment and put an end to raw sewage polluting waterways. But the latest analysis of water companies’ earnings suggests much of this will be used to pay interest on their mountainous debts and dividends to investors, many of whom live abroad.

Water companies were privatized debt-free in 1989.

Since then, bills have almost doubled in real terms (see chart), while the utilities – which are monopolies with no competition – are now drowning in £60bn of debt, having taken away £85bn in dividends. “This is a daylight robbery,” said Cat Hobbs, director of campaign group We Own it.

“Why should we waste this huge portion of our hard-earned money on dividends and debt? Our bills need to be paid for fixing leaks and stopping sewage.

“We have been scammed for 35 years, it has to stop.”

The University of Greenwich analysis shows that the ten water companies had revenues of almost £14 billion in 2023-2024, but paid out £3.7 billion in financing costs and a further £1 billion in dividends.

Investments in the network – known as capital expenditure – are generally funded from surplus customer accounts after other costs such as wages and business rates have been covered.

“All that 35 percent could be considered unnecessary, compared to state ownership,” said visiting professor David Hall, who conducted the study.

‘Another way of saying that is that we all pay a 35 per cent privatization tax, which amounts to £5 billion.’

Customers of Thames Water, which is teetering on the brink of collapse and could be nationalized again, paid 41 percent of their bills in debt and dividends. The utility was fined £18.2 million last week for paying ‘unjustified’ dividends that Ofwat said breached shareholder payment rules.

Thames is one of four companies that can appeal against Ofwat’s cap on accounts.

Another is Southern, where tens of thousands of customers were without water for days last week.

Ofwat awarded it a 53 percent bill increase over the next five years – the largest of any supplier – but Southern wants more.

According to Hall’s analysis, a third of Southern’s customer bills go to paying interest on its £6 billion debt pile.

“It’s a scam,” said Matt Staniek, who is campaigning to save Windermere in the Lake District from pollution, calling the utility giants “parasitic monopolies”.

A spokesman for Water UK, which represents the utilities, said £236 billion had been invested since privatization – double the annual pre-1989 level.