Dear Listener

From this week 20 million people in southern England cannot use a hosepipe to water plants, fill ponds unless there are fish in them or clean patios. The restrictions come just at the time when the new bills for 2012/13 are payable. And they are higher than ever.

The amount charged by water companies is regulated by Ofwat. At the moment it is supposed to follow inflation and this year the average bill should rise by just over 5 per cent. In fact the average increase is 5.7 per cent and some companies are putting up prices by a lot more. Three of the firms banning hosepipe use have imposed some of the highest rises – Southern up 8.2 per cent, Sutton and East Surrey up 7.3 per cent, and Thames up 6.7 per cent.

These above inflation rises are allowed by Ofwat to pay for major infrastructure projects such as new reservoirs. Overall Ofwat says investment by water companies is now running at four billion pounds a year – twice as much in real terms as was spent before privatisation in 1989. Over that time charges have risen 45 per cent in real terms.

It is not just prices customers complain about. They resent paying for water which never reaches anyones tap. In the Thames Water area one litre in every four seeps away. So by the time a London customer fills up their bath with 90 litres, another 30 litres have disappeared through cracks and joints into the ground.

Despite these problems no price cuts are planned. They will rise with inflation until at least 2015. And customers in the southern half of Britain will just have to pay their higher 2012/13 bills however reluctantly.

***IN MONEY BOX THIS WEEK***

Are you a mortgage prisoner? Trapped in an existing mortgage with high loan to value, negative equity, unable to leave a fixed term deal, or to remortgage? There could be a million of them or more and their plight may get worse. The Financial Services Consumer Panel tells us what it wants lenders and the regulator to do.

We spend four billion pounds a year on gift cards – usually for presents when we cannot quite decide what to get for someone. But is it a good idea? If the company goes bust the card will usually be worthless. And after a fixed period they expire – sometimes in as little as a year. We talk to the boss of the gift card association.

People who have a criminal conviction are routinely denied insurance – even for a vehicle where it is a legal requirement. New laws on disclosure and on spent convictions may help them to rejoin normal society.

Contracting-out of SERPS - wake up at the back - ended this week for personal pensions. And with it came more freedom to do what you like with your contracted-out pension pot. But freedom also means responsibility to do the right thing. And that can be hard. We guide you through the changes.

People in nursing homes can sometimes get all their fees paid for by the NHS. It is often a struggle to get the NHS to agree. And new rules began this month which make it harder to appeal if the request is turned down. A lawyer explains how it will work.

We did squeeze five stories in last week and we will try to do so again this week. Still only 24 minutes of course. You can hear what we manage by listening live at midday on Saturday, repeated Sunday 9pm, or anytime online at www.bbc.co.uk/podcasts/series/moneybox. Remember you can put in a regular order for our podcast. It is free.

There is more information on our website www.bbc.co.uk/moneybox where you can also download transcripts of past programmes and send us ideas or problems you want us to look into.

This newsletter is available at bbc.co.uk/moneybox/newsletter around the time it hits your inbox - tell your friends who do not subscribe. And you could join more than 29,000 people who now follow me on Twitter to enjoy - or rant about - my random but timely thoughts on money and a few other things whenever I am awake at twitter.com/paullewismoney.

Vincent Duggleby is here on Wednesday with Money Box Live at 3pm taking questions on saving and investing.

Best wishes,

Paul

PS. I will be on Breakfast on BBC One on Saturday talking about one of the items in our programme. And back on Breakfast on Tuesday morning with a story about payday loans – live for the first time from the new Salford studios. Times not fixed but probably hourly from 0620.

e-mail Paul Lewis