London commuters are to save up to £350 a year from a rail fares freeze as Rachel Reeves unveils a series of cost-of-living measures in her Budget.
The Chancellor hailed the first freeze in 30 years meaning that passengers would “not pay a penny more” on season tickets, peak returns for commuters and off-peak returns between major cities.
Regulated fares, which includes these tickets, were expected to rise by up to 5.8% next year.
They have generally increased over the years by RPI inflation in July which was 4.8%, sometimes with an added one percentage point, though they were capped below this after prices soared following the Covid pandemic.
The freeze, set to take effect from next March, is expected to save people buying an annual season ticket commuting to London from Brighton £356 a year, from Basingstoke £340, Reading £340, Colchester £388 and from further afield Swindon £664 and Bath £756, according to Department for Transport figures.
Despite an increasing number of London workers expecting to return to the office full time, many people are still partly working from home for a few days and wanting more flexibility on travel.
A commuter to London from Bedford, with a three-day a week over 40 weeks season ticket, is due to save £337.50, from Milton Keynes £315, Bishops Stortford £214.50, Guildford £199.50, Woking £172.50, Watford Junction £150.90 and Basildon £124.50, according to the DfT data.
Ms Reeves said: “Next week at the Budget I’ll set out the fair choices to deliver on the country’s priorities to cut NHS waiting lists, cut national debt and cut the cost of living.
“That’s why we’re choosing to freeze rail fares for the first time in 30 years, which will ease the pressure on household finances and make travelling to work, school or to visit friends and family that bit easier.”
Annual Season Tickets |
Current Price |
Assumed Price |
Saving |
Brighton - London |
£6164 |
£6520 |
£356 |
Basingstoke - London |
£5856 |
£6196 |
£340 |
Reading - London |
£5856 |
£6196 |
£340 |
Colchester -London |
£6700 |
£7088 |
£388 |
Clacton-on-Sea - London |
£7380 |
£7808 |
£428 |
Northampton - London |
£7352 |
£7780 |
£428 |
Wellingborough - London |
£8264 |
£8744 |
£480 |
Swindon - London |
£11472 |
£12136 |
£664 |
Bath - London |
£13016 |
£13772 |
£756 |
Source: Department for Transport |
The savings are based on the difference between ticket prices going up by RPI inflation in July of 4.8%, plus one percentage point, and no increase under the freeze.
Transport Secretary Heidi Alexander stressed: “We all want to see cheaper rail travel, so we’re freezing fares to help millions of passengers save money.
“Commuters on more expensive routes will save more than £300 per year, meaning they keep more of their hard-earned cash.”
The freeze will be welcomed by commuters in London, many of who still suffer often disrupted and overcrowded services.
But the city is set to be hit by a series of other measures in the Budget as Ms Reeves imposes an array of higher or new taxes after her U-turn on her manifesto-busting plan to raise the rate of income tax.
Homeowners of expensive properties worth over £2 million, or possibly £1.5 million, face a “mansion tax”, or higher levy on Council Tax higher bands, or possibly a combination of these two, a policy which will impact on London hardest.
Nearly 500,000 people in London and the wider South East are also set to be dragged into paying the higher rate of income tax if as expected Ms Reeves extends a freeze on the thresholds for paying this levy for another two years to 2029/30.
The vast majority of workers, as well as pensioners, landlords and electric car drivers are expected to be hit with tax rises or cuts in reliefs, with the wealthy set to bear the greatest burden of Reeves’ Budget as she seeks to plug a shortfall of around £20 billion in the public finances.
This will be offset by some moves to tackle the cost-of-living crisis, as well as to reduce NHS waiting list still at around 7.4 million, and to bring down the nation’s huge debt mountain.
The train fares freeze will save existing rail users £600 million a year, according to Labour sources, with more passengers expected to use the network.
Ms Reeves will announce the full cost of the policy in the Budget on November 26.
Season ticket (3 days/40 weeks) |
Current Price |
Assumed Price |
Saving |
Bedford - London |
£5817 |
£6154.50 |
£337.50 |
Milton Keynes - London |
£5439 |
£5754 |
£315 |
Stansted - London |
£4018.50 |
£4251 |
£232.50 |
Bishops Stortford - London |
£3699 |
£3913.50 |
£214.50 |
Guildford - London |
£3444 |
£3643.50 |
£199.50 |
Woking - London |
£2976 |
£3148.50 |
£172.50 |
Watford Junction - London |
£2601 |
£2751.90 |
£150.90 |
Basildon - London |
£2155.50 |
£2280 |
£124.50 |
Source: Department for Transport |
The majority of the country’s rail franchises are now back in public owners under Labour’s renationalisation programme, including London commuter services such as South Western Railway, C2C, Greater Anglia, LNER and Southeastern.
The Railways Bill, currently going through Parliament, will create Great British Railways (GBR), a new publicly-owned company to run and manage both tracks and trains, unlike the previous system with Network Rail and private train companies.
Ministers are promising that it will end years of fragmentation on the rail system, boost standards for passengers, and make journey easier and better value for money.
Ben Plowden, chief executive of the Campaign for Better Transport said: “We know that cost is the number one concern for people wanting to travel by train, so it is very welcome that fares will be frozen next year.
“As plans for Great British Railways gather pace, this is a positive sign that affordability for passengers is being given the high priority it deserves.”
Maryam Eslamdoust, General Secretary of the TSSA rail union, stressed: “This move ahead of the Budget signals a much needed and welcome step for hard pressed passengers many of whom continue to struggle with the cost of living.”
