Government hikes train fares by 4.6% and increases cost of railcards in blow to commuters as part of Rachel Reeves’ £40b tax bomb Budget

Commuters have been delivered a blow by Rachel Reeves’s new £40 billion tax bomb budget as train fares are set to rise by 4.6 per cent. 

Railcard holders aren’t safe from price hikes either, with the cost set to go up £5 by March 2, 2025 ‘subject to an industry proposal’. 

The new announcement comes with the likelihood of higher Tube prices, however London Mayor Sadiq Khan has the authority to set a different price. 

The increase in fares is one percentage point above July’s Retail Prices Index (RPI) measure of inflation, which until 2023 was used by Westminster governments to set the cap on annual rises in regulated fares.

Labour’s Budget document said the 4.6 per cent rise in train fares would be ‘the lowest absolute increase in three years’, however it will come as little consolation for travellers already feeling the immense pressure of the cost-of-living crisis. 

It comes as the fallout from yesterday’s tax bomb budget, which targeted businesses, pensioners and farmers, continues: 

Regulated train prices are set to go up by 4.6 per cent in Rachel Reeves’s new budget (stock image)

Its another blow to commuters who will also see railcard prices go up by £5 by March next year (file image)

In 2023 train fares soared by 4.9 per cent, in an increased dubbed as ‘brutal’ by Louise Haigh who was then the shadow transport secretary. 

About 45 per cent of fares on Britain’s railways are regulated by the Westminster, Scottish and Welsh Governments.

They include season tickets on most commuter journeys, some off-peak return tickets on long-distance routes, and flexible tickets for travel around cities.

Regulated tickets do not include fares set by train businesses themselves, including the cost of advance and first class tickets. 

Increases in unregulated fares are determined by train operators, however these are probable to be very similar to regulated ticket prices. 

Train companies decisions on prices are heavily influenced by governments because of contracts introduced during the coronavirus pandemic. 

Railcard prices are also set to increase by nearly 17 per cent, however this will be ‘subject to industry proposal’ 

The price of disabled passenger railcards will remain the same. 

Previously railcards cost £30 a year, and bagged the average user savings of ‘up to £158’ every year, according to the Treasury. 

It comes as Mayor of London Sadiq Khan previously announced his freeze on Transport for London fares would only be in place until March 2025.

At the time he opted against hiking up prices despite assumptions it would increase at the rate of national rail fares. 

Previously railcards cost £30 a year, and bagged the average user savings of ‘up to £158’ every year, according to the Treasury

It is expected that tube prices will also go up in March 2025, after Sadiq Khan’s partial freeze comes to an end

However the government’s decision to increase regulated rail fare could mean an increase in tube and bus prices in London. 

The bus fare in London currently stands at £1.75, and is the cheapest in the country. 

A spokesperson for the Mayor said: ‘Once a final decision on the 2025 fares package has been made, this will be published as per usual.’ 

MailOnline has approached Transport for London and Rail Delivery Group for comment.