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How to offset the cost of train price hikes

Paloma Kubiak
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Paloma Kubiak

Rail fares have today risen by an average 3.4% – the highest increase since 2013. Here are three ways to cut the cost of your commute.

The average 3.4% price hike applies to unregulated fares which aren’t overseen by the government; instead they’re set by train companies. This includes first class tickets and advance purchase tickets.

However, regulated fares, which include season tickets, have risen by 3.6% as the figure’s based on the previous July’s measure of inflation (RPI).

As rail fares are rising faster than the average wage growth seen by UK workers, many commuters will feel the pinch.

Here are ways to save money on your train journeys:

Travel loan from your boss

Companies may offer you benefits or incentives such as a travel loan. This can be up to the value of £10,000 per year before HMRC will get involved.

Jonathan Watts-Lay, director of Wealth at Work explains this gives employees two savings. “If you buy an annual season ticket than it is cheaper than buying a weekly or monthly pass, and the company won’t charge you interest, helping you save money,” he says.

If offered by your company, it’s typical for workers to pay off the interest-free loan over a 10-month period, and the loan doesn’t form part of your salary even though money is deducted from your monthly pay packet.

Benefit from the cost of an annual travel card

Buying an annual season ticket upfront can be out of the reach of many people, particularly those living in commuter belts and beyond.

But site CommuterClub enables you to benefit from the cost savings of buying an annual season ticket yet allows you to pay monthly instalments and get the 12th month for ‘free’.

For example, an annual London zone 1-4 travel card now costs £1,960 but if you buy monthlies, you’ll pay £188.16 every time. Over the course of the year, you would pay 12 x £188.16 (£2,257.92), nearly £300 more than if you had the funds to buy an annual season ticket.

But with CommuterClub, you pay £188.16 for 11 months (£2,069.76), therefore getting the twelfth month for ‘free’.

CommuterClub explains the loan rate (5.6% pa variable) is included in the monthly price you pay, but in order to be eligible, you do need to have a good credit score.

Split your ticket

If you benefit from flexible working or make occasional business trips around the country, splitting your ticket could be a money saver.

Instead of buying one single ‘through’ ticket for your journey, you buy multiple tickets to cover its component parts – same journey, same seat, no changes. This allows you to pick up the cheapest fares for different parts of your route, capitalising on advance tickets and off-peak fare changes.

This ticketing hack is perfectly legitimate – the only rule being that your train must stop at the stations named on your ticket.

As an example, a return ticket on Monday 8 January (one night stopover) between Birmingham and Leeds costs £128.60. However, by splitting your ticket at Crewe and Manchester Piccadily, you’ll save £56.34 (46%) paying £72.26 instead.

To do it, you need to know what to ask for but, once you do, you can buy these online or from station staff. You can also use split-ticketing websites such as Raileasy, Splitticketing, and Trainsplit. Split ticketing can work for commuters as well as leisure passengers – on all fare types.