£2 Bus Fare Cap: New Transport Measures Could Save Drivers and Bus Passengers in 2026/27
Government Announces Changes to Bus Fares and Energy Costs
The government has announced two measures expected to reduce transport and household costs for motorists and bus passengers.
The changes include a planned £2 cap on bus fares from January 2027 and a proposed VAT reduction on energy costs from October 2026. Combined, the measures could provide savings for eligible households and commuters.
VAT Reduction Could Save Drivers £65
According to figures cited by Carwow, the proposed VAT reduction could save some electric vehicle drivers up to £65 a year.
For example, charging a 100kWh electric vehicle from empty to full once a week could result in annual savings of around £65. Drivers who travel longer distances or households with multiple electric vehicles could potentially save more.
£2 Bus Fare Cap From January 2027
The planned bus fare changes would reduce the maximum fare from £3 to £2, potentially saving regular bus users money.
In England outside London, there were an average of 37 bus passenger journeys per person in the year ending March 2025. Based on that figure, the reduction could provide an estimated saving of around £37 per passenger annually.
Calls for More Affordable Public Transport
Maryam Eslamdoust, General Secretary of the TSSA, welcomed the proposed fare reduction, describing affordable public transport as an important part of tackling the cost-of-living pressures facing households.
The union is also calling for a broader transport strategy focused on making public transport more affordable, accessible and passenger-focused.
What These Changes Could Mean
If implemented as outlined, the measures could help reduce costs for:
- Regular bus passengers.
- Electric vehicle drivers.
- Households with multiple EVs.
- People who rely on public transport for work and daily travel.
The proposed changes form part of wider efforts to address household costs while encouraging more affordable and accessible transport options.
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