Anglian Water has been ordered to refund customers more than £38m for failing to meet its targets on reducing pollution and sewage spills. 

Water industry regulator Ofwat has said water firms in England and Wales must pay back £157.6m to customers for missing their performance targets, which include water leaks and supply interruptions. 

Anglian Water fell into the lowest category in the regulator's annual review and must refund customers £38.1m. This will be delivered in the form of lower bills next year. 

Despite water companies committing to reduce pollution incidents by 30pc, there has only been a 2pc reduction.

For the second year in a row no company achieved the regulator's top rating, although four companies showed an improvement from last year.

Thames Water will have to pay £56.8 million, the biggest fine, for the fourth year in a row.

Anglian Water, Welsh Water and Southern Water all fell into the lowest category of 'lagging', while the remaining ten water companies were rated 'average'.

Ofwat said customer bills will be slashed in 2025-26 to reflect the penalties, with the total rebates calculated in December.

Anglian Water has been approached for comment.