In a small saucepan, combine sugar and water.

Heat over medium heat, stirring occasionally until sugar dissolves.

Increase heat to medium-high and cook without stirring until the mixture turns golden brown, about 5-7 minutes.

Quickly pour caramel into four ramekins or a baking dish, swirling to coat the bottom evenly. Set aside to cool and harden.

Preheat your oven to 180°C (350°F).

In a mixing bowl, beat eggs and sugar until well combined.

Stir in vanilla extract.

Heat milk in a saucepan until it's warm but not boiling.

Gradually pour the warm milk into the egg mixture, whisking constantly until smooth and combined.

Pour the custard mixture over the hardened caramel in the ramekins or baking dish.

Place the ramekins or baking dish in a larger baking pan.

Pour hot water into the larger pan until it reaches halfway up the sides of the ramekins or baking dish.

Carefully transfer to the preheated oven and bake for about 30-35 minutes or until the custard is set around the edges but still slightly jiggly in the center.

Remove from the oven and let cool to room temperature.

Refrigerate for at least 2 hours or until chilled and set.

To serve, run a knife around the edge of each ramekin or baking dish, then invert onto serving plates.

Serve chilled, optionally garnished with whipped cream or fresh fruit. Enjoy your delicious caramel custard!