Rail fares in the UK are to be capped at the inflation rate under a five year plan announced by government on Tuesday, which means rail fares will increase by just 1% next year.
Office of National Statistics (ONS) figures released on Tuesday show that the Retail Prices Index (RPI) for July was 1% and this figure is used by the government to calculate regulated fares for the following year. This will result in the lowest fare increase since 2010 and also means that earnings will outstrip rail fare increases for first time since 2003, as latest figures show that earnings are increasing by 2.4%.
The government had also announced last September that train operating companies can no longer use a “flex” rule to raise certain individual fares by up to 2% more than the permitted average increase.
According to the Department for Transport, a quarter of a million annual season ticket holders will save an average of GBP425 by 2020. It added that most journeys in 2014 were made using a regulated fare and these fares will continue to support a rail modernisation programme that is the biggest for over a century. An investment of GBP38bn is being made in improving the network up to 2019. This investment is expected to deliver crucial benefits for passengers, such as providing relief from crowding on some of the country’s busiest routes.
Rail Minister Claire Perry stated: “As part of our long-term economic plan, we are investing record amounts in transforming the UK’s rail network in order to provide better journeys for everyone, and fares have an important role to play in delivering this investment.
“But I know that many families are concerned about the cost of rail travel, which is why we are putting an end to above inflation fare increases. This will make a real difference to household budgets, saving season ticket holders around GBP425 each over the next five years.”