Good news for commuters.
Rail fare rises will be capped at 2.5 per cent in 2015 rather than the expected 3.5 per cent in a move designed to reduce the burden on commuters' wallets.
The government has frozen the rise in regulated fares - season tickets and anytime singles - at RPI inflation of 2.5 per cent for the second year in a row.
The rise is typically calculated on an RPI plus one per cent basis, with train operators able to add a further two per cent increase on some routes under the so-called “flex rule”.
This would have increased fares by between 3.5 per cent and 5.5 per cent next year. The government said it will also scrap the “flex rule” however, meaning no ticket prices will rise more than 2.5 per cent in 2015.
Train ticket prices have risen more than people’s earnings as wage growth slows, leaving people out of pocket in real terms. In the last 10 years since fare rises have been pegged to RPI, they have risen 50 per cent, compared with wage growth of 30 per cent.
The freeze at 2.5 per cent means rail fare hikes shrink for a third consecutive year, though this is likely to be inline with a similar decline in wage growth.
The reduced rise could save some commuters more than £100 a year. Here are some of the savings on season tickets for some of the capital’s busiest commuter routes.