Train fare increases still ahead of inflation

Posted by Elizabeth Harrison in Credit Crunch on 4 November 2013 - Elizabeth is a Senior Credit Analyst at checkmyfile.

There are certain things you can rely on after Christmas; belts need to be loosened an extra notch, money boxes feel disappointingly empty and if you're a regular train user it's only a few weeks before the dreaded annual January rise in train fares.

Just after the Christmas period is obviously the perfect time of year for a nice healthy increase in the cost of your train tickets and for the past decade rail fares have risen consistently and by huge amounts each time.

Research carried out by the Campaign for Better Transport has revealed that fares tend to grow 20% faster than wages while the TUC has shown that since the recession began in 2008, average train fares have risen almost three times faster than the average wage. These price increases are usually justified with 'essential rail modernisation' though many train users might wonder when this modernisation will actually become noticeable to them.

In 2014 rail users can look forward to increases of at least 4.1% in ticket prices which sounds pretty horrific but it could have been worse. After repeated complaints from train users, many of whom are reliant on the rail service to earn their money in the first place, the government has finally taken action. As part of the fares and ticketing review and in a move to overhaul ticket pricing, certain fare increases will be capped at 6.1%.

Until now fare increases have been calculated by adding 1% to the year's Retail Price Index inflation figure. That's a significant amount already but add to that the fact that train companies have then been allowed to add up to 5% on top of this rise and the financial strain on commuters increases yet again. This additional rise has now been limited to 2%. There is good news for part-time workers too who up to now would not have travelled frequently enough to make a season ticket worthwhile. They will now be able to take advantage of such tickets with discounts available to those making the same journey 3-4 times a week.

A cap on increases and better fare options is certainly encouraging news because in most cases, those using the train have no real alternative. Anyone who's travelled on a busy commuter train recently will likely agree that if a viable alternative presented itself they would not remain loyal to train travel.

Patrick McLoughlin, the transport secretary, is keen to point out how the government is focussing on changes which will help hardworking people but though these developments are a move in the right direction, it still means travellers will be paying above-inflation prices.

The leader of the TSSA rail union, Manuel Cortes, is obviously not impressed. "There is no action whatsoever to actually end inflation plus fare increases. McLoughlin is merely offering to hold passengers' coats while they keep getting mugged every year by the same set of spivs – the private rail firms."

With much room for improvement, campaigners will not be able to rest just yet.

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