Water firms must cut annual water bills by 5 per cent in real terms over the next five years, regulator Ofwat ruled yesterday.

The decision means average annual charges for water and sewerage services for England and Wales will see a real-terms fall from £396 to £376 in current prices.

But with RPI inflation currently at 2.3 per cent and wage “growth” at just 1 per cent many households may still find it an increasing struggle to make ends meet.