Commuters in England with season tickets are to be spared some of the pain of next January's rail fare rise after Chancellor George Osborne announced a price cap.

This year's July RPI inflation figure of 2.5%, had meant that regulated fares, which include season tickets, would have risen by an average of 3.5% in January 2015. The formula that dictates rises is RPI + 1 percentage point.

But Osborne announced he is knocking 1 percentage point off the annual rise, meaning the new year increase will be limited to 2.5%.

He also announced he is scrapping the 'flex' rule which allows some train companies to push regulated fares up by a further 2% above the 3.5% rate, as long as the overall rise across all tickets is 3.5% on average.

The move means that no season ticket will rise by more than 2.5% and the Government claims more than 250,000 annual season ticket holders will save around £75 over 2014 and 2015.

Unregulated fares, such as off-peak leisure tickets, are set by the train companies, not the Government, and will be announced separately.

Train fares in Scotland are already capped at July's RPI rate of inflation, so they can rise by up to 2.5% in January 2015.

There are no planned price rises in Northern Ireland as Translink, which runs the rail network, does not increase fares in line with inflation.

And no decision's yet been made on rail fare prices in Wales.

Martin Lewis
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Additional reporting by Paloma Kubiak.

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