Getting moving on the cost of living
A plan to bring down bus and rail fares
17 July 2026
Transport is the largest expense, excluding mortgage payments, for rural households and the second largest for urban households. The contribution that public transport makes to meeting mobility needs at an affordable price has declined in recent years. Bus and rail fares have continuously risen since the 2000s, at levels significantly above average inflation. A high, and growing, level of car-dependency has resulted. This leaves households exposed to the high costs of car ownership, particularly when fuel prices spike.
Together, these vulnerabilities have put transport costs at the forefront of the cost –of living crisis. Indeed, alongside poor service provision and quality they have become totemic of the Britain’s decline. Many households are simply unable to meet their essential transport needs. When mobility needs go unmet, society suffers, education and employment opportunities are missed, high streets decline, and social cohesion suffers.
Overcoming the transport challenge is also key to a fast green transition. So far, the high upfront costs of electric vehicles, and the neglect of public and active travel, have meant the transition being presented as a luxury for the elite, rather than something that would improve everyday life in the UK. Universal public transport provision can be one of the most foundational and transformative approaches to addressing inequality. It ensures that, no matter their personal, economic or geographic circumstances, individuals can access the essentials of a good life.
We propose two short-term public transport interventions that could make an immediate difference to UK households in the grip of a cost –of living crisis: a bus package including a £1 fare cap and free travel for under-25s; and a rail package introducing a major simplification and expansion of the railcard system. We also propose a target for the government to create a regional integrated rail and bus pass (leveraging the success of its rail nationalisation and consolidation work) by the end of this parliament (2029). These policies are aimed at enabling affordable access to transport, as well enabling greater connectivity for regions of England outside London, as well as those from lower-income households.
Our proposals create value for households both by reducing their everyday costs and meeting more of their travel needs. Our favoured bus fare policy creates £60 of value per year per bus user (averaged across over 31 million users), and our proposed new railcard creates £100 per year of value for rail travellers (averaged across over 5 million buyers). Our integrated regional transport pass proposal generates up to £500 of value per subscriber (averaged across over 5 million subscribers). Young people benefit disproportionately, gaining around £235 per user per year at scheme maturity (averaged across over 7 million young users).
Polling published by Persuasion UK shows that the bus fare policy we tested has extraordinary political pulling power. By some margin, a £1 bus fare cap is the single most positively impactful policy on public voting intention of any of the cost –of living support measures they tested. Meanwhile, free travel for under-25s has, by some margin, the highest rate of spontaneous recall among the public of the policies tested.
For our policies to be the most impactful, they must be combined with urgent infrastructure and service improvement. This includes improving route accessibility and availability on the bus network, alleviating rail capacity constraints (such as the critical East Midlands/CrossCountry bottleneck), and current concerns around consumer experience and ticketing. We included some of these considerations within the model, but further work is required.
The governance and ownership structure, as well as the devolution of transport services is not discussed in detail in this briefing. NEF has long recognised that devolution is necessary and valuable for creating more inclusive regional economies and bringing decision making closer to residents. Increasing local power to set, fund, and integrate regional transport will amplify fare policy impacts. Moreover, our proposals align well with the government’s ongoing work to nationalise train operation and simplify stewardship of the network and ticketing.
Image: iStock
