Slow wage growth, a combination of rising transport fares and house price growth, which encourages employees to live further from their workplaces, is putting increasing pressure on many UK savers. In fact, figures from the Trade Union Congress suggest British commuters spend 17 per cent of their salary on rail tickets, with fares rising by 27 per cent since 2010.
In light of this challenge, how can savers find smarter ways to reduce their transport costs?
While Money Saving Expert demonstrates that for some routes, commuters could save over £200 per year by purchasing an annual rail season ticket instead of monthly alternatives, some savers may not have sufficient cash reserves to pay the annual fee at the start of the year. For these individuals, it’s worth checking whether their employer currently runs a salary repayment scheme, or would consider doing so, whereby the business advances employees the full cost of the ticket, which will then be paid off through monthly wage deductions.
When travelling further afield, splitting one journey into several steps by purchasing separate tickets can sometimes reduce the overall price of the trip, with comparison tools available online to check whether this applies for a particular journey. Many savers may already be aware of railcards for seniors, young people, mature students and disabled passengers, but may not know that ‘Two together’ railcards are also available for two adults who regularly journey together, also offering one third off standard fares.
In recent years, online services have extended the concept of car-sharing, and the associated cost benefits, by offering a simpler way for savers to connect with other travellers undertaking the same journey, beyond their immediate sphere of acquaintance.
When buying a new car, bear in mind that the true running cost will also depend on fuel-efficiency, taxation, insurance and repair costs, meaning a less expensive second-hand car will not always work out cheaper in the long run. In fact, research suggests new cars could be 73 per cent less expensive to run compared with models which have been in operation for just five years.
The Energy Saving Trust also suggests electric cars may offer lower operating costs, covering six times the mileage of a petrol car for a comparable cost, on average. Electric vehicles are also eligible for a 100 per cent discount for London Congestion Charges, leading to savings of up to £2,900 per year, with Government subsidies of up to £5000 available against the initial purchase price.
To encourage commuters to turn to greener transport alternatives, the Government currently runs an employer-led cycle scheme offering employees at least 25 per cent off the price of a bicycle and relevant accessories. 522,000 people have already taken advantage of this opportunity, which operates through a 12 month salary sacrifice hire scheme, where the monthly payment is taken from before-tax income, after which the bicycle is available for purchase at a heavily discounted price.
The use of mobile application based taxi services has grown rapidly in recent years due to the possibility of lower fares, but users should be careful to check prices before booking, as fares can dramatically increase during periods of high demand. Some of these services are also planning to introduce shared lift options in the near future for customers travelling to a similar location, so those without their own car may soon be able to reap the benefits of car-sharing too.
Savers, get in touch with Aldermore on Twitter if you have any other clever tips for cutting the cost of travel within the UK.
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