Rail commuters received some good news today when the Government announced that the annual fare rises in January 2013 and January 2014 will not be as high as planned.
The Government had intended to allow train companies to raise the average price of regulated fares - which include season tickets - by RPI inflation plus 3% in the new year and in January 2014.
But Prime Minister David Cameron said that the rise for the next two years will be RPI plus 1%.
This means that in January 2013 commuters will have to fork out for average rises of 4.2% rather than the planned 6.2%.
The January 2014 increase will be 1% above whatever the RPI inflation rate is in July 2013, while the Department for Transport (DfT) said today that it was planning that from January 2015 onwards the regulated fares cap will be RPI plus 1%.
The RPI plus 1% formula will also be used for London's buses and the Tube for the next two Januarys.
The DfT said the decision to reduce the planned increase was expected to benefit more than a quarter of a million annual season ticket holders who can expect to have an extra £45 back in their pockets as a result of today's decision.
It added that many more holders of weekly and monthly season tickets could also see lower fares and some commuters will be over £200 better off over the two years.
The DfT said the reduction had been funded from savings identified in the department's budget.
However, even with the reduction UK train travellers will still be paying some of the highest fares in Europe.
Also, the RPI plus 1% formula only applies to regulated fares which form only around 40% of total fares. Train companies have the freedom to rise the price of unregulated fares by as much as they like.
There will also be the fear that with train companies now deprived of some of their annual revenue by the reduction in the planned increase, they will raise the cost of car parking at stations.
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