• Rail fares to rise by 3.1% next year
• Hike brings us closer to the £10,000 a year commute
Laura Suter, personal finance analyst at investment platform AJ Bell, comments:
“Commuters who have faced delays, cancellations and over-running engineering works will be dismayed to discover that their fares will rise by 3.1% from January, following a 3.6% hike in January this year.
“We are nearing the £10,000 commute mark, as the cost of a season ticket from Swindon to London, including tube travel, will rise from £9,448 to £9,741 next year following the increase.
“Commuters already paying high costs on popular routes will face further hikes, for example the commute from Oxford to London, including a London travelcard, will breach the £6,000 mark – rising from £5,932 to £6,116, while the commute from Macclesfield to Manchester will exceed £2,600– rising by £79 a year to £2,626.
“The rise in prices is determined by July’s inflation reading, but the figure for the retail prices index (RPI) is used, rather than the lower figure for the consumer prices index (CPI). The Office for National Statistics has branded the RPI measure of inflation as ‘flawed’ with ‘serious shortcomings’ and does not recommend it being used, so it remains baffling as to why the Government continues to clobber everyone with price hikes based on an inaccurate measure.
“The fact that CPI is used for hikes that benefit Brits, such as state pension increases, tax credits or public-sector final salary schemes, while RPI is used for price hikes on rail fares and setting interest rates for student loans beggars belief. There is no logical justification for RPI’s continued use, and the Government’s insistence on using whichever measure best suits it should end.
“This hypocrisy was highlighted in the past few weeks, when the Government revealed it was cutting the interest for savers with NS&I’s Index-linked Savings Certificates, by switching the index linking to CPI inflation, from RPI. The move will hit around half a million savers, and could see their interest cut by around 1 percentage point.”