Bus fares capped at £2 as government promises more help with the cost of living

Single bus fares across England will be capped at £2 from January, Andy Burnham, the new prime minister, announced this morning. The cap is currently £3.

That means from the new year, no single bus journey should cost more than £2 - a third off the current top fare. The scheme is backed by £454 million of funding, which includes money so that the devolved governments can bring in similar caps.

Some places already have cheaper fares, including London and Greater Manchester, so if you live in one of those areas you won't see much change. But for millions of people everywhere else, a return trip to work will cost £2 less a day from January – saving £10 a week or around £40 a month for anyone who commutes by bus every day.

Announcing the change, Andy Burnham said good, affordable transport is essential and no one should be priced out and left behind, adding that lower fares will give people breathing space to help with the cost of living.

It builds on yesterday's energy announcement

The bus cap is the second cost of living measure in two days. Yesterday the government announced that VAT will be removed from household electricity bills from 1 October, saving the typical household about £45 a year.

Don't forget: kids travel free in August

There's help before January too. Children aged five to 15 can travel free on local buses across England for the whole of August. You don’t need to apply for anything. Just get on the bus with your child.

What this means for your budget

Every pound helps, but these savings won’t go far if your budget is stretched. The energy VAT cut works out at less than £4 a month, and the bus cap doesn't start until January. If money is tight right now, don't wait for government help to arrive.

There are things you can do today. Check you're getting all the benefits you're entitled to, using our free online checker, as millions of pounds go unclaimed every year. It’s also worth looking at whether you qualify for a broadband or water social tariff, which can cut those bills significantly. And if you're behind on any payments, or using credit to get through the month, we can help you sort it before it grows.