Water companies must do more to deal with customers who are struggling to pay their bills.

That’s according to water market regulator Ofwat, which estimates bad debt currently adds an average of £21 to each customer’s yearly bill.

It says tackling this issue now by identifying which customers are having difficulties before they owe too much will help reduce business costs and improve affordability for consumers.

Ofwat suggests companies should make affordability schemes more available, move to more frequent billing to avoid the difficulty of having to pay one large bill each year and ensure customers are on the most appropriate tariff and payment method.

The regulator also suggests improving customer communication services and looking to other industries to see how they deal with similar problems.

Ofwat says water suppliers must also do more to get money off customers who can afford to pay their bills but refuse to do so.