Rail fares to rise by 3.8% in March next year

RAIL fares will be hiked by 3.8% in March, the Department of Transport has confirmed.

Commuters are facing the biggest increase to train fares in a decade.

The price rises will heap more misery on commuters who cannot drive or walk to work.

Laura Suter, head of personal finance at AJ Bell, said: "Commuters already pay through the nose for some routes and this will add to the cost burden for many."

Following the increase, an annual commute from Oxford to London including a London travelcard will increase by £245 to £6,700.

A yearly ticket from Tunbridge Wells to London including travel card will rise by more than £220 to £6,033.

And the commute from Macclesfield to Manchester will leap by £84 to £2,284 a year.

Rail minister Chris Heaton-Harris said that the increase was a "fair balance".

The rise has been tied to the July retail price index, which is lower than the most recent inflation figures of 5.1%.

Heaton-Harris said it would ensure "we can continue to invest record amounts into a more modern, reliable railway, ease the burden on taxpayers and protect passengers from the highest RPI in years".

But the latest rise comes as inflation has risen to its highest level in a decade.

Struggling households are already having to cope with rising energy bills and petrol prices.

Many have also found it difficult to readjust to commuting costs after returning to the office following months of working from home during the pandemic.

Rail fares already went up by 2.6% in March this year.

The increase saw the average commuter's annual costs rise to £3,144.

Labour said it equated to a 43% increase - or £950 - over the past decade.

Suter said: "The rise comes at a time when the majority of workers are already facing a double-whammy of higher National Insurance and frozen income tax rate bands, both of which eat away at take home pay.

“Already everyone’s bills are rising and increasing interest rates are hiking the cost of mortgage and debt - many families will feel like this is another increase in costs they can’t afford."

Why are rail fares going up?

Rail fares are regulated by the government.

Typically, each year the government uses the July Retail Price Index (RPI) measure of inflation to work out how much ticket prices will go up.

The increase is capped at RPI plus 1%.

RPI in July this year was 3.8% so that means the Department for Transport could have hiked prices by as much as 4.8% under that cap.

Not all fares will increase and the price changes will vary across regions and rail operators.

Suter said: "Commuters have at least been spared an even higher increase – as last year the Government added an extra 1 percentage point onto fare rises in order to claw back money lost during the pandemic, when passenger numbers plummeted.

"What’s more, with RPI inflation currently sitting at 7.1% commuters should be braced for a record-breaking rise the following year that will make this one seem reasonable.”

Historically price rises have taken effect in January, but the government delayed the increase this year because of the Covid pandemic.

It comes just one day after the Bank of England hiked interest rates for the first time in three years.

Heaton-Harris added: "Delaying the changes until March 2022 offers people the chance to save money by renewing their fares at last year's price.

"That includes the 100,000 people who are already making savings with cheaper and more convenient flexible season tickets.