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How to pay for rail commuting costs

You may have secured your first job or just be moving into an exciting new role, and are considering how to pay for your travel to work. There is no getting around it, commuting is expensive. With rail fares rising every year and average commuting costs reaching into the £1,000s, what is the best way to pay for your work commute and be smart about your money? Let’s take a look.

Annual, monthly or weekly?

First you need to consider whether you want an annual, monthly or even weekly train pass. If you are looking to save yourself money in the long term, an annual season ticket will work out cheaper than a monthly or weekly ticket.

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For example, if you commute from Reading to London Paddington, an annual season ticket would currently cost you £4,604. However, if you chose a monthly ticket at £442 a month, then your cost for the year would be £5,304, while if you went down the weekly ticket option (at £155.40 a week), you would be looking at £6,000.80 for the year. An annual ticket therefore represents a potential annual saving of £700 over a monthly ticket or £1,396.80 over a weekly ticket.

There is also another advantage if you purchase an annual season ticket, in that you secure that price for the full year; considering the recent increases in train fares, this is not a bad idea.

Of course, all of the above suggestions largely relate to a full-time employee commuting five days a week. If you are part-time or plan to commute on only a few days a week, it may be worth looking at whether a monthly or weekly ticket would work out cheaper in the long run compared to investing in an annual pass.

How will I pay for it?

So you may have decided that an annual season ticket is the way to go, but how are you going to pay for it? The cost can typically run into thousands, so unless you have that amount already saved, you may need to consider some other ways to pay the full amount.

Negotiate it as part of your package – If you are starting a new job and are aware that you will need to buy an annual season ticket in order to travel to work, you can always negotiate to have the cost of travel included in your salary package. It may mean taking a lower base salary or a smaller bonus percentage, but see whether your employer would consider including the season ticket as part of your overall package.

Employer loan – Some employers offer an interest-free or low-interest loan in order to cover commuting costs. These loans typically work by the company paying the full amount for the season ticket or providing you with the money to buy it. You then repay that loan in 10 or 12 instalments, which will be taken from your net salary in your monthly pay packet.

0% credit card – Credit cards with an interest-free period on purchases can be a useful tool to pay for an expensive item like an annual season ticket; you then pay it off over a period of time. Some of the top 0% purchase cards on the market at the moment offer interest-free periods in the mid to high 20s of months, meaning you could potentially have just over two years to pay off your credit card balance. However, this is obviously subject to whether you can successfully apply for a 0% credit card. Added to that, if you are planning to use the credit card for commuting costs on an annual basis, it would be wise to calculate your monthly repayments based on clearing your season ticket balance before you need to purchase a new season ticket for the next year.

Commuter scheme – If none of the above is a viable option for you, you might want to consider commuter schemes such as Commuter Club. This is a finance scheme with which you can make monthly payments to cover the cost of your ticket. It does save you money compared to purchasing a monthly train ticket: based on my example of a train ticket from Reading to London Paddington, you would be looking at £406 a month with Commuter Club versus £442 for a monthly ticket. However, over the year you would pay a total of £4,872, which is £268 more than the cost of buying an annual season ticket yourself.

Interested in a 0% purchases credit card? Take a look at our top picks for 2019

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