Households in England and Wales will be charged an average of £405 for their water and sewerage over the coming year, an increase of £9, as companies commit to cutting leaks and improving the environment.
Water UK, which represents water companies, said the 2% increase would go towards a £44 billion investment commitment over the five years to 2020 to cut 370 million litres a day leaking from pipes, ensure that nearly 5,000 fewer properties will be flooded with sewer water and 50 beaches are cleaner.
It said the change to average bills was within the context of an overall cut of 5% in real terms between 2015 and 2020 as part of five-year plans confirmed by regulator Ofwat in 2014.
However the Consumer Council for Water (CCWater) cautioned that the bills customers actually end up paying will vary depending on their supplier and individual circumstances, and urged households not to overlook ways to save on costs.
CCWater chief executive Tony Smith said: "Most water companies are reducing their charges before inflation is added to bills which has softened the blow, but this will still be an unwelcome increase for millions of customers that are facing other rising costs."
More than three million households in England and Wales find their water bills unaffordable, according to research by CCWater.
It warned that tens of thousands of households were still missing out on social tariff schemes designed to reduce the bills of eligible low-income customers by as much as 90%.
Water UK said companies were "on track" to meet a five-year commitment to deliver financial support to an additional 459,000 households by 2020, meaning that by 2020 the industry would be helping around 1.8 million people to pay their bills.
Water UK chief executive Michael Roberts said: "Even though the cost of water and sewerage is much less than other services, it all adds up, which is why water companies are doing everything they can to keep bills as low as possible while keeping up huge levels of investment."