It’s the news that no commuter wants to hear – rail fares are going up again. So, when are fares increasing, and how does the price hike affect you? Here’s everything you need to know.
When do rail fares increase?
Rail fares in England rise on 1 March 2021. This isn’t too unusual, though. Fares always increase annually, although the changes normally come into force on the first working day in January rather than March.
So, what’s the reason for the delay? Well, we’re living in uncertain times, and the delay gives commuters more time than normal to buy season tickets at the current (lower) price.
This is good news for those working from home who don’t yet know if they’re returning to the office in early 2021 or not. It’s also welcome news for anyone who is worried about their finances and needs a bit more time to save up for a ticket.
But just how much more will you be paying on rail fares from March? Let’s take a look.
How much more will I be paying?
It depends on whether you’re buying a regulated fare or not.
- Regulated fares, such as season tickets and off-peak tickets, are increasing by RPI+1, or 2.6{429fc2506e610357e12b2a5665db82631200a2e00b3a1d8839077d76f18e2e8b}.
- Unregulated fares, including first-class tickets, should also go up by 2.6{429fc2506e610357e12b2a5665db82631200a2e00b3a1d8839077d76f18e2e8b}, but this hasn’t been confirmed yet.
So, what does this mean in real terms? Put simply, the price of the average season ticket will go up by £80 in March 2021.
Why are rail fares rising so much this year?
Rail fares normally rise at the same rate as inflation. So, based on UK inflation rates, we expected fares to rise by 1.6{429fc2506e610357e12b2a5665db82631200a2e00b3a1d8839077d76f18e2e8b} in 2021. However, the coronavirus pandemic has changed all that.
Essentially, there are less of us commuting to work than normal, which means we haven’t bought many train tickets this year compared to previous years. As a result, the UK government offered the struggling train firms some financial support to keep essential services running.
Now, they need to recoup some of these costs, which means a higher price hike than normal for commuters.
What does the rail fare rise mean for me?
Okay, so that’s what we can expect from rail fares in 2021. But what does the price hike mean for you?
Well, let’s start with some more good news. Although the price rise is above inflation, it’s a smaller increase than the 2.8{429fc2506e610357e12b2a5665db82631200a2e00b3a1d8839077d76f18e2e8b} rise we saw at the start of 2020. It’s also the lowest “actual” increase since 2017, according to the Department of Transport. Put simply, then, it’s higher than we expected, but it’s not necessarily an alarming rise. Here’s how you can prepare:
- Shop around for a flexible season ticket, especially if you’re a part-time worker or you’re not returning to the office full-time.
- If you’re planning on buying a season ticket in 2021, consider buying it before 28 February. That way, you’ll pay the current rate (you’ll pay less than if you buy it in March).
- Generally speaking, you pay less for rail tickets the earlier you book them. So, if you can, book train tickets for mid to late 2021 in January or February.
- If you’re making a long train journey, consider splitting your tickets. Essentially this means buying a few rail tickets for different legs of the journey rather than buying a single block ticket. It can sometimes save you money.
Takeaway
Okay, so the news about rising rail fares is disappointing, but it’s not entirely unexpected.
Thankfully, you still have plenty of time to buy rail tickets at the 2020 rate, so don’t worry if you can’t afford to pay the higher price just yet.
One final piece of advice: if you’re working from home and not sure if you’ll be returning to the office next year, plan for rail fares anyway. Open a savings account and put the money aside. That way, you won’t need to worry about finding the cash for a season ticket at short notice, because you’ll already have budgeted for it!
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The post Rail fares: when will they increase, and by how much? appeared first on The Motley Fool UK.
