Single bus fares in England outside London will be capped at £2 from 1 January to 31 December 2027, the government confirmed on 22 July 2026. The new cap replaces the current £3 cap, is backed by £400 million of extra funding and could cut some fares by a third on participating services.
TL;DR · LAST REVIEWED 22 July 2026
- Single bus fares on participating services in England outside London will be capped at £2 for the whole of 2027, from 1 January to 31 December.
- The announcement was made on 22 July 2026 by the Prime Minister's Office and confirmed to Parliament by the Department for Transport the same day.
- The £2 cap replaces the current £3 fare cap, which would otherwise have run until the end of March 2027, and prevents fares rising when that cap expired.
- The scheme is backed by £400 million of extra government funding, rising to £454 million including allocations for the devolved governments through the Barnett formula.
- The government says the cap could cut single fares by up to a third, with the biggest savings on longer rural and coastal routes where uncapped fares can exceed £10.
- It sits alongside free bus travel for children aged 5 to 15 on participating services this August and a rail fare freeze announced earlier in 2026.
Bus fare caps in England: what applies and when
| Until 31 December 2026 | £3 cap | Current national fare cap on participating services outside London |
| 1 January to 31 December 2027 | £2 cap | New cap announced 22 July 2026, backed by £400 million |
| London | Not included | London fares are set separately under Transport for London |
| Children aged 5 to 15 | Free in August 2026 | Great British Summer Savings scheme on participating services |
| Uncapped long-distance singles | Could exceed £10 | Government figure for the most expensive routes without a cap |
Source: Department for Transport and Prime Minister's Office, 22 July 2026
KEY FACTS
- Cap level: £2 per single bus journey on participating services in England outside London
- Dates: 1 January 2027 to 31 December 2027, replacing the current £3 cap which was due to run until the end of March 2027
- Funding: £400 million extra for England, £454 million including devolved governments, funded by reprioritising the Department for Energy Security and Net Zero budget
- The previous £2 cap was linked to an estimated 30 million additional bus journeys in 10 months, according to the government
- Announced 22 July 2026 by Prime Minister Andy Burnham in his first week in office, with a written statement to Parliament from the Department for Transport
What is the new £2 bus fare cap
From 1 January 2027, single bus tickets on participating services in England outside London will cost no more than £2, under a scheme announced on 22 July 2026 and backed by £400 million of extra government funding.
The government confirmed the new cap in a written statement to Parliament from the Department for Transport on 22 July 2026, alongside a press release from the Prime Minister's Office. The cap applies to eligible single bus fares on participating services across England outside London and will run for the whole of 2027, from 1 January to 31 December. It replaces the existing £3 fare cap, which had been due to run until the end of March 2027, meaning fares will fall rather than rise when the current arrangement would have expired. The announcement came in Prime Minister Andy Burnham's first week in office, and the government has framed it as a cost of living measure aimed at everyday journeys to work, education, healthcare and leisure. The Department for Transport also confirmed the individual funding allocations that local transport authorities will receive to support the scheme and the wider bus network. London is not included because fares in the capital are set separately under Transport for London, which operates its own fare structure.
How much could passengers save
The government says the £2 cap could cut single fares by up to a third compared with the current £3 cap, with the largest savings on longer rural and coastal routes where uncapped single fares can exceed £10.
The headline saving is straightforward: a journey that costs £3 under the current cap will cost £2 from January, a reduction of a third. For passengers making a return commute five days a week, that is a saving of £2 a day, or around £10 a week and roughly £500 over a full year of commuting, compared with paying capped £3 singles. The bigger effect is on routes where fares would otherwise be far higher. The government states that without any cap, single fares could rise above £10 on the most expensive services, which are typically longer routes in rural and coastal areas. For those journeys, the cap represents a saving of £8 or more per single trip against the uncapped price. The government also points to evidence from the previous £2 cap, which it says was associated with an estimated 30 million additional bus journeys in just 10 months, suggesting lower fares changed travel behaviour as well as reducing costs for existing passengers. Actual savings depend on the routes used and whether the operator participates in the scheme.
Which services and areas are covered
The cap covers eligible single fares on participating bus services across England outside London, with the devolved governments in Scotland, Wales and Northern Ireland receiving equivalent funding through the Barnett formula to make their own decisions.
As with the previous fare caps, the scheme applies to participating services, meaning operators opt in rather than being compelled to join. Under the current £3 cap the large majority of single fares outside London are covered, and the government's announcement indicates the same participation model will continue. Passengers in London are outside the scheme because Transport for London sets its own fares, with a single bus fare in the capital already below the new cap. In Greater Manchester, the Bee Network has capped single fares at £2 for the last four years under local arrangements, which the government cited as a model for the national scheme. Scotland, Wales and Northern Ireland are not covered directly, but their governments will receive a share of the £454 million total funding through the Barnett formula and can decide how to spend it. The government has also confirmed it is supporting six mayoral authorities to set up bus franchising, giving local leaders more control over routes, timetables and fares in their areas, alongside the powers in the Bus Services Act 2025.
How is the £2 cap funded
The cap is funded by £400 million of extra money for England, £454 million including the devolved governments, found by reprioritising the Department for Energy Security and Net Zero budget and switching planned international climate finance from grants to loans.
The Treasury has been specific about where the money comes from. The £454 million total, of which £400 million applies to the scheme in England, is funded from savings within the Department for Energy Security and Net Zero's existing budget, principally by converting funding that had been set aside for international climate finance projects from grants into loans. The Chancellor, John Healey, said the measure was funded by savings made elsewhere rather than new borrowing or taxation. The bus fare cap sits within a wider set of spending commitments on buses: the government has committed more than £3 billion for bus services over the next three years, over £1 billion a year, and announced more than £100 million of additional support for the sector earlier in 2026. That earlier package included the funding for free bus travel for children aged 5 to 15 on participating services this August under the Great British Summer Savings scheme, as well as money for local transport authorities and operators to absorb rising costs and maintain services. The government argues that extending the cap to the end of 2027 also gives local authorities more certainty to plan services.
What else is changing for transport costs
The bus fare cap arrives alongside a rail fare freeze announced earlier in 2026, which the government values at £600 million for passengers, free bus travel for children in August, and a consultation on stronger transport powers for mayors.
For household budgets, the bus cap is one of several transport measures landing over the next year. The government froze regulated rail fares earlier in 2026, the first such freeze in 30 years, which it says will save passengers £600 million in total, with commuters on some routes saving more than £300 a year. Families with children aged 5 to 15 can use free bus travel on participating services in August 2026 as part of the Great British Summer Savings scheme, which also includes discounts at restaurants and attractions during the school holidays. Beyond fares, the government has said it will consult on giving mayors additional planning powers, including the final say over public transport decisions such as mass transit schemes, building on the franchising powers already being taken up by six mayoral authorities. For passengers, the practical points to note are the dates: the £3 cap continues on most single fares outside London until 31 December 2026, the £2 cap applies from 1 January 2027, and both depend on the operator participating in the scheme, so the fare charged on a specific route is always worth checking before travel.
RELATED GUIDES
DISCLAIMER
This article is for general information only and does not constitute financial advice. Fare caps apply to participating services and eligible fares only. Passengers should check the fare for a specific route with the operator or local transport authority before travelling.
Frequently asked questions
When does the £2 bus fare cap start
The £2 cap applies from 1 January 2027 to 31 December 2027 on participating services in England outside London. Until 1 January 2027, the majority of single fares outside London remain capped at £3.
Does the £2 cap apply in London
No. London is outside the scheme because Transport for London sets bus fares in the capital separately, and a single bus fare in London is already below the new cap level.
Does the cap apply to every bus journey
No. The cap applies to eligible single fares on participating services, meaning operators opt in to the scheme. Under the current £3 cap most single fares outside London are covered, and the government expects the same model to continue.
How is the £2 bus fare cap paid for
The scheme is backed by £400 million of extra funding for England, £454 million including the devolved governments, funded by reprioritising the Department for Energy Security and Net Zero budget and switching planned international climate finance from grants to loans.
What happens in Scotland, Wales and Northern Ireland
The cap itself covers England outside London. The devolved governments receive a share of the funding through the Barnett formula and can decide how to use it, so arrangements in Scotland, Wales and Northern Ireland may differ.
SOURCES
- Department for Transport written statement to Parliament – accessed 22 July 2026
- Prime Minister's Office press release – accessed 22 July 2026
- GOV.UK guidance on the £3 national bus fare cap – accessed 22 July 2026
