Photo: William Anderson via flickr
Rail fares have just gone up by more than inflation, while the price of petrol has been rising too.Understanding why your train ticket has suddenly become much more expensive appears to require a degree in Crazy Logic from the University of Taking Your Cash.
All most of us know is that our wages have not increased much but our travel costs have – a sinking feeling which has not been improved by the transport minister, Norman Baker, claiming that the new fares are “not nearly as expensive as is being presented”.
Added to increases in petrol prices and car parking charges, the latest rail fare increases are making just getting to work an almost unaffordable luxury for some. Many of the fare rises are linked to the retail prices index (RPI), the higher measure of inflation. However, most of our wages are not linked to this measure, and the formula puts price rises at 1pc above RPI anyway, so most of us will have less cash in our pockets once we have bought our tickets.
With this in mind, how can you understand what is happening at the ticket office, and is there anything that can be done about the cost of travel?
The first step is understanding how much your costs have risen and why. If you drive, a quick look at the charts on the PetrolPrices.com website ought to be enough to explain what is going on at the pump. Although the Chancellor scrapped a planned increase in fuel duty in last year’s Autumn Statement, fuel prices have still run far above inflation for quite some time.
For rail fares, the system is far more complicated. Some rail fare increases are regulated by the Government, while others aren’t. Even if your fare is a “regulated” one subject to government control – and if you are a season ticket commuter it should be – it will be rising by more than inflation, and because of something called “flex” the increase may be far higher than the formula suggests.
Essentially the rail firms can pick and choose how they apply the 1pc above RPI (4.2pc) increase across their basket of regulated fares, as long as individual fares do not rise by more than 9.2pc. Some will do well out of this while others on popular commuter routes will not. For example, according to the Bedford Commuters’ Association, the increases in many popular fares are far above this 4.2pc figure.
On First Capital Connect, anytime day singles from London to Mill Hill Broadway go up by 9pc, to Elstree & Borehamwood, Hendon and Cricklewood by 8pc and to West Hampstead and Kentish Town by 7pc.
Some train operators on lines that have seen heavy investment have carte blanche to put their prices up by more than RPI plus 1pc, and their individual fares can rise by nearly 13pc. Fares on Southern are regulated at RPI plus 2pc, while Southeastern and Northern Rail fares are regulated at RPI plus 3pc.
Experts believe that there is a limit to how much Britain can bear when it comes to rail fare increases. Stephen Joseph, executive director of the Campaign for Better Transport, said: “The UK has some of the highest fares in Europe and there is a limit to how far these above-inflation fare rises can continue without harming the economy.”
A group of MPs yesterday accused some rail companies of profiteering. Their chairman called on the Government to rule out “super-peak” fares that would make rush-hour commuters pay even more.
Research from the TUC’s Action For Rail campaign shows that train fares have risen nearly three times faster than wages since the recession began. Frances O’Grady, the general secretary of the TUC, said: “Train fares have massively outstripped wages and inflation, even during the recession. Train operating companies seem to have completely ignored the fact that real-term incomes and living standards have fallen and have ploughed ahead with eye-watering price rises.”
Figures from uSwitch show that the increases are already hitting families. Nearly a fifth of consumers have already cut back on fuel use because of their perilous financial circumstances. “When it comes to balancing the books, we are treading a fine line,” said Michael Ossei of uSwitch. “We are facing a winter of discontent.”
The sustainable transport charity Sustrans said the rail fare increases would eat into family budgets, meaning that millions more people will be unable to get to their jobs, see their family or access health care – a condition it refers to as “transport poverty”.
Malcolm Shepherd, the charity’s chief executive, said: “Train travel is becoming increasingly unaffordable. Many are facing a stark choice: fork out for expensive train travel, own a car and cut back on essentials, or stay put and miss out on jobs and opportunities.”
Figures from the Office for National Statistics this month showed that the average family now spent more of its money on transport than it did on housing, food and power. Out of a record average expenditure of £484 a week, £64 went on transport. That would not be enough for one tank of petrol in many family cars, and would cover just two weekly tickets from London’s Zone 3 to Zone 1 for a family of commuters.
Saving on rail fares is complicated. For a start, there are nearly 100,000 fares out there, with a bewildering variety of names. Some can be used only at certain times of day, while others need to be bought in advance. On top of this come a plethora of railcards that can help to cut your fares as long as you travel only at certain times of day.
For peak-time travellers (most commuters), the position is particularly tricky. Most savings tricks are designed to fill trains when they are traditionally empty, meaning that they are not valid on peak services. Buying an annual season ticket can be a good saving, particularly if you can get a free loan from your company. These tickets come with a Gold Card, which can help you to save even more on leisure travel as long as you are in the Network Railcard area – which you can find on the National Rail website.
This will give you and up to three other adults travelling with you a third off all off-peak travel within the Network Railcard area. Two children under five travel free with each fare-paying passenger, while up to four children between five and 15 pay £2. You can also buy a railcard for another adult for £1.
Other possible commuter savings include asking your bosses whether you can work flexible hours so you can travel off-peak.
Those who commute by car could check out car-sharing websites such as nationalcarshare.co.uk and liftshare.com to see if anyone else is going the same way, allowing them to save on fuel by doubling up. A card on your staff noticeboard at work might do the same thing if you work in a busy office.
Commuting by bus or coach can also save you money if you live on a busy bus route. For example, travelling on the Oxford Tube to London costs £1,130 for an annual pass, compared with £4,532 for a season ticket on the train.
For those who are travelling for leisure, there are more tips and tricks to try. These include the railcards mentioned above, as well as other options such as the Senior Railcard, while operators also run regular special offers on off-peak services. Martin Lewis, who runs the MoneySavingExpert.com website, recently launched a new split-ticketing app, which allows you to search for ways to cut the cost of train journeys by checking whether it would be cheaper to buy two tickets for a longer journey rather than one ticket for the whole trip. This is a legal way of cutting travel costs.