Consumers in England and Wales will see their water and sewerage bills fall by an average of 2% in the coming year.
Water UK said the reduction, which will take £9 off consumers’ bills, will come into effect in the year starting April 2015.
The announcement comes after industry regulator Ofwat said water bills would drop by 5% between 2015 and 2020 under its draft proposals published last December.
Consumer Council for Water (CCWater) welcomed the news but said affordability is still a concern for many householders.
Tony Smith, Chief Executive of CCWater added: “Much more still needs to be done to ensure customers who are struggling or unable to pay their bill get the help they need. That’s why we are working with water companies to ensure they raise awareness of the assistance schemes they can offer customers who urgently need support.”
Water UK said it will provide a package of measures worth £40 million to support customers who are struggling to pay their bills or are in debt.
It said by April, 14 of the 18 companies would have so-called “social tariffs” to provide reduced bills for poorer customers.
Pamela Taylor, Chief Executive of Water UK added: “Water companies understand the pressures their customers are under and are delivering lower bills and even more support for struggling households.”
The UK water industry contributes around £15 billion to the economy every year.