Rail fares to rise 3.1% from January 2019


Updated on 30 November 2018 | 2 Comments

Train companies have confirmed they'll increase prices by 3.1% next year: here's how to save money on your journey.

Millions of rail passengers will face a rise of 3.1% in train fares from January 2019, it has now been confirmed.

The increase is linked to the Retail Prices Index (RPI) measure of inflation for July which was 3.2%, so the 3.1% increase was marginally lower than expected.

The hike is slightly less than in January this year when ticket prices increased by 3.6% and well below 2011's 5% rise.

It follows news that the 26-30 railcard will return permanently, and that a new Rail Ombudsman will deal with unresolved complaints.

Which fares will go up?

July’s RPI measure of inflation is used to put up the prices of ‘regulated fares’ up, which account for around 40% of tickets, including season tickets, off-peak return tickets and walk-up anytime season tickets in England and Wales.

In Scotland, season tickets are mainly affected, with off-peak fares to rise by RPI - 1% or 2.2%. There are no plans for increases in Northern Ireland.

Commuters that must buy a season ticket to get to work will be hit the hardest by the hikes according to passenger groups.

The Swindon to London Paddington commute is one of the most expensive in the country, rising from £8,740 to £9,020 for an annual season ticket.

Anthony Smith, chief executive of passenger watchdog Transport Focus, criticised the price hikes:

“After a torrid summer, passengers hit by the timetable crisis will be amazed that the talk is about a fares increase! A fares freeze would benefit all passengers and begin the process of rebuilding trust and start to bring passengers back to a railway they can rely on."

Unregulated fares, which cover super off-peak and advance tickets, will be set in December.

UK train delays and cancellations: how to claim refunds and compensation

Are we being ripped off?

The formula normally used to calculate how much rail fares go up by is July’s RPI + 1%, which allows train companies to hike costs above inflation.

But since 2014, the Government has altered this calculation so rail fare increases have been capped at RPI, to try and appease commuters fed up with rapidly escalating costs.

However, campaign groups argue the bigger problem is using RPI as the index to set prices rather than the Consumer Prices Index (CPI) measure of inflation, currently 2.4%.

CPI is used as the approved benchmark for uprating benefits like the State Pension and it’s usually lower than RPI.

However, RPI despite no longer being a National Statistic, continues to be used to determine things like train fares, even though the measure is not recommended by the ONS.

Laura Suter, personal finance analyst at investment platform AJ Bell, commented that “the fact that CPI is used for hikes that benefit Brits, such as state pension increases, tax credits or public-sector final salary schemes, while RPI is used for price hikes on rail fares and setting interest rates for student loans beggars belief.

"There is no logical justification for RPI’s continued use, and the Government’s insistence on using whichever measure best suits it should end.”

We've written more about the unfair way inflation is applied over here.

Transport Secretary Chris Grayling has called upon rail companies to base future increases on CPI, but his suggestion that railway employees wages also be pegged to CPI has been criticised.

For more on inflation take a look at CPIH: what the new UK inflation rate includes, how it's calculated and how it will impact your money.

How to beat the hikes

To avoid paying more you should aim to renew your season ticket before the rail fare hikes come into force on 2 January 2019.

That way you can lock into 2019’s prices for up to 12 months.

If that’s not an option, consider taking out a cashback credit card.

These deals pay a percentage back when you spend meaning you can save. The American Express Platinum Cashback Everyday Credit Card pays 5% for the first three months of spending, so buying a £2,000 season ticket would get you £100 back.

For more tips check out our guides: cheap rail season tickets: six ways to cut costs and cheap train tickets: cut the cost of UK rail travel.

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