Rail passengers in England will face average rises of 3.1% on fares next month, rather than the 4.1% hike which had been expected, Chancellor George Osborne revealed in today's Autumn Statement.

Average regulated fares in England, which include season tickets, increase annually each January in line with July's Retail Price Index (RPI) inflation rate +1%.

This meant that passengers had been set for a 4.1% rise from January, but this has been pegged back to 3.1%, with effect from 2 January.

While the fares are still rising, the Government says an annual season ticket from Chelmsford to London should be around £35 less in 2014 than it would have been without this change, while the equivalent ticket from Oxford to London should be around £45 less.

But some fares could rise by more than 3.1%, although additional increases have been capped at 2%. (See Train fare rises capped MSE News story.) So from January, no regulated fare can go up by more than 5.1%.

“This is good news for commuters," says Michael Roberts, director general of the Rail Delivery Group, which speaks on behalf of the rail industry.

"We strongly support the Government's decision to scrap January's above-inflation average increase in season tickets and other regulated fares. This will encourage even more passengers to travel by rail, helping to sustain already significant investment in more trains, faster services and better stations."

While welcoming the fares' decision the Campaign for Better Transport said: "Ticket prices will still rise three times faster than wages and above-inflation rises are still on the cards for 2015 and beyond."

Full details of next year's rail fares are not yet available - the Rail Delivery Group, which speaks for the rail industry, said train companies were re-pricing next year's fares but they would be available "in time" for 2 January.

Trials of flexible season tickets – aimed at helping part-time workers – will take place in the south-east of England next year.

Today's announcement applies to England and brings the country in line with Scotland, where the new year rise is also 3.1%.

Save money on train fares

The cost of travelling by train may be going up, but here are some of our tips to help you save money (see our Cheap Trains guide for more):

  • Buy in advance. Most train companies put tickets on sale 12 weeks ahead. So the earlier you book, the more chance you have of getting one of their cheap advance tickets.
  • Two singles can beat a return. If you're going on a return journey, check if two singles are cheaper. It may not always be cheaper, but it's worth a try.
  • Get a railcard. Frequent travellers should consider a railcard, if they qualify for one. Those aged 16-25, the over-60s, those with disabilities and adults who travel with kids may all qualify. Most railcards cost £28 a year (£20 for a disabled person) and get the holder a third off many fares.
  • Split your ticket. Imagine you're travelling from London to Sheffield. If the train stops at Derby, check whether it's cheaper to buy a ticket from London to Derby and a second ticket from Derby to Sheffield. It's perfectly legal as long as the train stops at that intermediate station. Use our free TicketySplit iPhone app or mobile site to find out if you can get a cheaper walk-on single fare by breaking down your journey.

Additional reporting by the Press Association.