New inflation figures mean more hefty increases for 2015, unless Government steps in.
The Office for National Statistics (ONS) has released July’s Retail Prices Index (RPI) inflation figure, which in theory dictates how much rail fares will increase by in the new year. The RPI for July 2014 was 2.5%.
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The formula for rail fare increases
The formula used to figure out how much prices will increase by is RPI + 1%.
This uses July’s RPI. So the average increase in fares for 2015 will be 3.5%
Season tickets for most commuter journeys are affected by this formula, as are off-peak fares.
Other fares are known as ‘unregulated fares’. These are where competition exists between travel companies, and these are set by train operators.
What does this mean for me?
If you’re a commuter, this means yet another above-inflation rise to deal with.
You may not see the cost of your journey rise by exactly 3.5% – it could be slightly less or slightly more, as train companies are allowed to raise the price of some routes above the average, so long as the average increase in price across all routes satisfies the formula. And the Government could step in and lower the increase, as it has done in the past, particularly with a General Election looming.
The Campaign for Better Transport (CBT) projected before today's RPI announcement that fares will have risen by 24.7% this Parliament, while average wages as of August have only risen by 6.9% over the same period of time. It claims that some commuters are now paying out a fifth of their annual income on season tickets.
As an example, someone who commutes to a London station from Bishop’s Stortford currently pays £3,604 a year for their ticket. Based on two daily journeys, that’s £7.50 for each trip. With the new bump in prices, that will increase by over £100 to £3,730.14.
Another example: a 12-month ticket between Alderley Edge and Manchester Piccadilly would set you back £1,908 annually, which works out at £3.97 per journey. So from January, the price is set to go up by around £70, to £1974.78.
These prices are rough projections: as stated above, the rail companies are set to increase ticket prices by an average amoutn across their networks, so routes that are more frequently used are likely to see higher rises than the average.
You can work calculate the price of a season ticket on National Rail’s website.
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More on travel:
How to cut the cost of rail and coach travel