Coronavirus Self-Employed & Small Limited Company Help
19 April 2021
Commuting to work is expensive, with many paying £1,000s for rail, tube or metro tickets each year. And fares will increase by up to 2.8% from January 2020, following a 3.2% hike last January, meaning it's vital to go for the cheapest ticket possible – it can save you £100s each year.
Across the country, whether you're Oyster-carding from Orpington or training from Tiverton, you could save a decent chunk of cash by getting an annual season ticket rather than buying 12 monthly ones or – even worse – weekly travelcards.
"Surely I won't save that much? I'm still using the same train line, just as often," you may say. But this is actually the best way to cut your commuting costs, often slashing the cost of travel by £100s each year.
This table shows a few examples of how much you could save by buying an annual season ticket when commuting into some of the UK's major cities...
|Belfast||Carrickfergus to Belfast Great Victoria Street||£98.50||£945.60 (1)||£236.40|
|Birmingham||Rugby to Birmingham New Street (2)||£152.50||£1,588||£242|
|Cardiff||Barry Island to Cardiff Queen Street||£72.60||£756||£115.20|
|Glasgow||Greenock West to Glasgow Central||£167.90||£1,748||£266.80|
|London||Crystal Palace to Oxford Circus||£158.30||£1,648||£251.60|
|London||Colchester to Liverpool Street||£505.40||£5,264||£800.08|
|London||Guildford to Tottenham Court Road (3)||£443.20||£4,616||£702.40|
|Manchester||Hazel Grove to Manchester Piccadilly||£103||£1,072||£164|
Table correct as of December 2018 but based on prices from 2 January 2019. (1) Based on paying for annual aLink smartcard upfront. Monthly direct debit option costs £1,004.70 – more than paying upfront, but still less than buying 12 monthly tickets. (2) Only valid via Coventry. (3) Only valid via Clandon or Woking and based on ticket including London travelcard for zones 1-6.
It's hardly a secret that buying 'in bulk' usually saves on commuting costs, but the main problem is that many people can't get the cash together to be able to afford paying a one-off sum of what is often £1,000s in just one month. Luckily, there are several ways around this, and they don't all cost the earth. Here are five ways you can spread the cost of buying a season ticket. Read through until you find one that suits you.
Many employers offer interest-free, or low-interest, season ticket loans.
Your employer will either give you a cheque made out to the travel company you're buying the season ticket from, or will give you the cash into your bank account for you to use on the ticket. It will then take the repayments from your net salary in 10 or 12 instalments. It's worth asking your employer if it does this, or, if not, if it can start offering this scheme.
Cost to you for the season ticket (using London zones 1-3 as an example): £1,648 – a saving of £251.60 compared to paying monthly.
If your employer doesn't offer a season ticket loan scheme or you're self-employed, another way to get a loan for the annual ticket without having to pay any interest is to get a 0% credit card, provided you pay it off during the 0% period. Interest-free credit cards are a great way to spread the cost of your annual travelcard.
Try this Bank of Ireland card, which gives you a 0% period for 24 months if you're accepted, or M&S Bank, which gives 20 months at 0% for new spending if accepted. Budget to pay the balance off as soon as you can, but always clear the card or balance transfer any remaining debt before the 0% period ends, or you'll pay the representative APR of 19.9% on any remaining balances, for the cards above.
You could get a new 0% credit card every couple of years, but only if your credit record's good enough to do so. There are several different cards out there, so this is worth a try. For the top deals, see our Best 0% Credit Cards guide. And you can use our Credit Card Eligibility Calculator to see which cards are likely to accept you.
Cost to you for the same season ticket as above (assuming you clear the balance within a year): £1,648 – a saving of £251.60 compared to paying monthly.
Another option is to sign up to a commuter scheme such as CommuterClub. This is a way to pay for your annual season ticket for England, Scotland and Wales over 12 months via a finance scheme.
And while the cheapest way to get an annual season ticket is to pay it all in one go, as above, CommuterClub is cheaper than buying it monthly from a train firm, and we've blagged you a bigger discount than normal.
CommuterClub pays the upfront price for you, gives you the ticket, then asks you to pay it back in 12 monthly instalments at roughly the same rate you'd pay if you bought monthly tickets, and until Fri 31 Jan you get 65% off the first month's payment and 50% off the final month's via our special link* (normally 50% and 50%) – so you essentially get more than a month 'free'.
CommuterClub makes money because your repayments still add up to more than it paid for the annual ticket. This is equivalent to it having charged an annual interest of 5.6% on the ticket (equivalent to 10.6% rep APR). As this counts as a loan, you'll need to pass a credit check.
We looked at a few examples and in all, the overall annual cost via CommuterClub was cheaper than buying monthly tickets from a train firm, but more expensive than buying it upfront.
For example, a London travelcard (zones 1-3) that starts on Thu 2 Jan 2020 works out as follows:
So via CommuterClub it's £72 more expensive than buying upfront, but £186.80 cheaper than paying monthly. The total cost including delivery is £1,774.50 – a saving of £180.30 versus paying monthly.
Saving up every month in advance is going to be one of the cheapest ways to do this. But, while you're saving, it requires you to effectively pay for your season ticket twice a month for the first year – once for your current card and once to build up your savings – and requires you to save for a year before you can get your first annual season ticket.
Cost to you of the travelcard: £1,648 – a saving of £251.60 compared to paying monthly.
If you can't use any of these methods, then sadly, you won't be able to save this time around.
But it's worth looking at your finances and doing a proper budget. Is there anywhere you can cut back in order to be able to save for next year? Or, if you've a low eligibility score for the credit cards, could you take steps to improve your credit score so you could get one in the future? Our Credit Scores guide has the lowdown.
For more information on cutting the cost of train travel, read the Cheap Train Tickets guide.
What happens depends on what sort of ticket you have. If it's one that can be loaded on to an electronic card, then you can just go to the train company or TfL and get a new card (you may have to pay £3-£5 as a deposit). The season ticket will be registered to you, so can just be transferred to the new card, and the old card cancelled.
Train companies that only provide paper tickets (which is most of them) have a bizarre rail ticket clause stating that you can only have one replacement for a paper ticket each year. So if you lose it twice, you'll need to pay for the second replacement at full season ticket price, unless there are exceptional circumstances such as robbery or theft.
This has been a long-standing issue for part-time workers, especially those commuting long distances.
It's something the Government has committed to addressing although progress is slow, only one pilot scheme has so far materialised.
However, part-time commuters in the London area can take advantage of cheaper fares without buying a weekly ticket, as the daily fare cap on Oyster cards was cut in January 2015 to be equivalent to one-fifth of the relevant weekly travelcard.
A Senior Railcard allows all over-60s discounted travel. It costs £30 a year, and if you get one, then you can get a third off all Anytime, Off Peak and Advance fares.
However, it won't work on season tickets, so you'd need to calculate if your daily tickets with the discount are better value for travelling than a season ticket.
Watch out if you're making journeys in the south-east and east of England (the Network Railcard area), as you will be restricted in terms of what time you can travel if you use the railcard – annoying if you're commuting to work during peak hour.
This'll depend on how much your journey costs, and how often you commute.
If we assume a daily round-trip cost of £10, and a monthly ticket cost of £120, you'd be better off with a monthly ticket than paying daily if you commuted 13 days/month or more.
The average month has 22 working days, so in this case you'd have to be travelling in more than half the days to make the monthly ticket worth it.
If you don't know in advance how many days you'll be commuting, then it may be worth chancing the pay-as-you-go route, and trying to minimise trips.
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