How to beat the rail fare rise?

4 timeless annual ticket hacks that will save you hundreds of £
Today hasn’t been a great day for rail commuters. I just discovered that my next annual season ticket will rise by another £110. This means I will need to fork out almost £260 per month just for the pleasure of getting into the office and back, sitting on what’s usually quite crammed trains. BBC reported that this was the biggest fare rise in 5 years.
However here are a few hacks that will beat what I call the “ticket renewal blues”.

1. Dump the Tube, invest the savings in a bike

To add the annual TfL travel card onto my account would cost me almost £900. I regularly hear my colleagues who lives in London spend more than £600 per year on TfL.
However as I discovered, the average commuting distance according to the Department of Transport National Travel Survey in 2015 was 6.6 miles across the UK. This means in densely populated cities like London it’s likely to be significantly shorter. Taking the average of all of my colleagues who live in London (30 of then in total), the direct line between their home to the office was a staggering 5.3 miles!
Adding them together, you’ve got it. £600 will get you a damn good and fast bike (my Halfords Carrera hybrid bike costed me £250 and its a delight to ride) and you will get to your destination faster and more refreshed. Also apparently cycling boosts your sex drive. Honestly I can’t find a reason not to like it!
An even better news is that the initial bike purchase really is an investment. Pay it, maintain it and you will reap the savings year after year until when you drop.
To add cherry on the top, there are schemes that allows you to purchase bikes on finance tax-free. It’s called Cycle To Work. If you employer doesn’t offer it then start pestering them. You will save another 20%.
So what are you waiting for? Get peddling!

2. Get an interest-free credit card

If you are reading this section then I assume your employer doesn’t offer an interest-free annual ticket loan. If it does then take advantage of it right away!
If not then don’t despair. Interest-free credit cards are really an interest-free loan in disguise. Their operating mechanism is simple: interests are not charged for any spending made on the card within the promotional period, usually lasting between 6-30 months, as long as the minimum payment amount is made every month.
This is the route I use as my company does offer loans. I am a loyal fan of the Sainsbury’s Bank Purchase Credit Card, whose 0% promotion period lasts a staggering 31 months, which is enough for at least 2 years worth annual tickets.
A note of caution: the interest-free privilege is only valid as long as the minimum payment is made by the required due date as any breach in the contract could result in the offer being withdrawn and the standard APR (an eye-watering 18.9%) to kick in. So my advice is: use this type of card for your annual ticket only and whatever the cost of the annual ticket is, divide that by 12 and set the monthly direct debit mandate to that amount. This way you can be sure to be debt-free after 12 months.

3. Join Commuter Club

If your credit score isn’t high enough to qualify you for an interest-free credit card, then Commuter Club is your next best bet. They are the equivalent of buying a monthly ticket however you only pay for 11 months to get the benefit of 12-month of travel. This means you achieve a saving of around 8.3% per year versus the standard monthly ticket.
Personally the saving isn’t as great as buying an annual ticket, given that you are still effectively paying for a monthly fare, which is at least 12% more expensive than the annual ticket. However for those of you who are currently buying monthly tickets from National Rail or TfL every month, Commuter Club offers some decent savings.

4. Calculate to see if you actually need an annual ticket

Annual tickets offer great savings (up to 30% on my route), IF you use trains regularly. However if you are like me who goes to work regularly but not every day (I work from home on average 1-2 days per week) then annual tickets might not be the cheapest overall option.
Taking my train route as an example:
  • There are around 20-22 working days per month. To stay conservative let’s say 22 days.
  • Most people get 2 days of holiday per month so that number goes down to 20.
  • Based on my route (£260 for an annual ticket), this means the daily commute cost is £13 versus the Anytime Return cost of £22, not a bad saving.
  • If I work from home 1 day per week and we assume there are 4 weeks per month, the the effective number of commuting days is only 16.
  • Now my daily commute cost has risen to £16.25, still almost 30% saving
If however
  • I work from home 2 days a week, then the number of commuting days dwindles to 12 and the daily cost rises to £21.67, almost on par with the Anytime Return ticket price.
So by my calculation, if you commute for more than 3 days a week the. The annual ticket is definitely work it. If it’s less than that figure then I suggest you purchase tickets on a daily pay as you go basis.
What I’ve started doing is keeping track of the days that I go into the office and then I will do an annual calculation to see if the annual ticket is still worth it.
Wrap up
Now that you’ve seen these 4 easy hacks, there’s no excuse not to action them asap and get saving!