HAMPSHIRE residents could be in for a major boost over their water bills.

Britain's water companies have been told by the industry regulator to cut household bills in real terms by 5 per cent over the next five years.

Ofwat said the decision - which confirms a provisional determination in August - would see national average bills for water and sewerage services in England and Wales fall from £396 to £376.

When the process for setting bills began last year, water companies had submitted plans which would on average have cut bills by 2 per cent in real terms.

Ofwat rejected a request by Britain's biggest water company, Thames Water, to increase household charges by 3% over 2015-20 to help pay for the £4.2 billion Thames Tideway Tunnel. It has been told it must instead cut them by 5 per cent.

It also said utility firms must improve efforts to tackle water leakage, supply interruptions, sewerage water flooding of properties and see cleaner water at beaches.

Ofwat chief executive Cathryn Ross said: ''With bills held down by 5 per cent and service driven up over the next five years, customers will get more and pay less.

''Where companies stepped up to do the best they could for their customers we did not need to intervene, but where companies fell short we stepped in to make sure customers get a good deal.

''Now the hard work begins. Companies will only build trust and confidence with their customers if they deliver.

''Those who do can look forward to fair returns, while those that don't will be hit in the pocket and face a tough five years ahead.''