The way train fares are calculated is 1% above the retail price index (RPI) in August of the year before the price rise. Therefore from January 2015 prices will rise at 1% over the RPI of 2.5% in August 2014. Price rises are set separately by England, Wales and Scotland. For the past 3 years Scotland has not risen its fares at all, whilst Wales has replicated England in the past.
Regulated fares includes season tickets, “anytime” single tickets around major cities, and off-peak inter-city return tickets.
However, under a “flex” rule, train companies can raise fares by 2% above the average, as long as the overall average stays at RPI plus 1%, this means you could find some fares rising well above the 3.5%.
The reason, the Government is reducing how much it pays to support the railways and expects those of us that use the railways to pay for it. Problem is that forces more people onto the roads, or it should, but rail usage continues to rise year on year!