Rail fares to be frozen in England next year

Rail fares in England are to be frozen next year for the first time in 30 years, the government has announced.

The freeze until March 2027 will apply to regulated fares, which includes season tickets and off-peak returns.

The most recent fare rise, in March 2025, was 4.6%. Rail fares traditionally have gone up in January, based on the July rate of the retail price index (RPI) + 1% - although this formula has not always been followed.

The announcement comes days before the chancellor sets out the government's financial plans in the Budget on Wednesday, with Rachel Reeves indicating that cutting the cost of living will be a key focus.

However, at the same time the chancellor is also widely expected to increase taxes to help fill a multibillion-pound gap in her spending plans.

Meanwhile, the government is expected to announce an extra £1.3bn in funding for a scheme to encourage the use of electric vehicles in the Budget.

But it is also possible electric vehicle owners could face a new tax in the form of a pay-per-mile charge.

The chancellor is expected to set out a range of smaller tax rises in her Budget, after backing away from increasing income tax rates - a move which would have been a clear breach of Labour's election promise not to raise "the basic, higher or additional rates of income tax".

However, the government has not ruled out extending the freeze on income tax thresholds - the level people start paying tax or have to pay higher rates.

The freeze means any pay rise would see people paying more tax, with more people dragged into a higher tax band, or having to pay tax on their income for the first time.

Reeves is also expected to scrap the two-child benefit cap, a limit that means parents can only claim universal credit or tax credits for their first two children.

There has been pressure from Labour MPs to remove the cap, which was introduced under the Conservatives - a move that could cost more than £3bn.