Government confirms return of £2 bus fare cap from January 2027

The Government has announced that the national £2 cap on single bus fares across England will return from January 2027, replacing the current £3 cap. The new cap is expected to remain in place for one year and will be backed by an extra £400 million of government funding.

The announcement follows the £3 national fare cap, which has been in place since January 2025 and is currently due to run until March 2027. The Government has confirmed that the lower £2 cap will instead be introduced from January 2027, reducing the maximum cost of a single journey on participating bus services across England.

What does this mean for operators?

While passengers are likely to welcome lower fares, operators will be looking for further detail on how the scheme will operate in practice. Previous fare cap schemes have relied on government reimbursement to participating operators, with payments intended to compensate for reduced fare income.

Further guidance is expected from the Department for Transport on eligibility, reimbursement arrangements and how the revised scheme will interact with existing funding and local bus initiatives.

A continued focus on bus travel

The return to a £2 cap signals a continued commitment to making bus travel more affordable while encouraging greater use of local bus services.