Commuters braced for rising energy bills and higher borrowing costs may find their rail fare increases aren’t as bad as expected next January.

Despite train companies being private companies, the Government has the power to limit increases on some rail fares to ensure they do not exceed the cost of living and remain affordable.

Around 45% of all rail fares are subject to the Government’s cap including season tickets on most commuter journeys and some off-peak return tickets.

The increases usually take place each January and are linked to the retail price index (RPI) from the previous July.

Other services that link bills to RPI include broadband and mobile phone networks, which argue that increasing customer bills help maintain services and infrastructure.

This is a contentious enough issue as its calculations no longer meet international standards and it tends to be higher than the more widely recognised consumer price index (CPI).

Another issue is the actual RPI rate as a high measure can mean rail tickets are too expensive for travellers.

If train fares were to increase by July’s RPI rate next January, they could go up by 12.3%, the largest ever increase amid the ongoing cost-of-living crisis.

It wold mean, for example, that commuters travelling between Reading and London on any route would have to pay an extra £620 for the new season ticket cost of £5,664.

But the Government has instead said fares will not go up by so much and will be frozen until at least March 2023.

A Department for Transport spokesperson comments: “The Government is taking decisive action to reduce the impact inflation will have on rail fares during the cost-of-living crisis and will not be increasing fares as much as the July RPI figure.

“We are also again delaying the increase to March 2023, temporarily freezing fares for passengers to travel at a lower price for the entirety of January and February as we continue to take steps to help struggling households.”

Similar action was taken during the pandemic to give commuters more time to purchase tickets at lower prices.

The Government hasn’t confirmed how much the new cap will rise by, but this is usually confirmed each December.

 

Source:

https://commonslibrary.parliament.uk/how-much-could-rail-fares-increase-by-in-2023-and-why/