£2 bus fares from January 2027

The new £2 cap is backed by £400 million of extra government funding. This action to ease the cost of living is being funded by savings from reprioritising the Department for Energy Security and Net Zero’s budget, including by switching funding for international climate from grants to loans.

The scheme will replace the existing £3 fare cap and ensure that eligible single bus fares on participating services cost no more than £2. It will particularly benefit passengers making longer distance journeys, including those in rural and coastal communities, where fares can often be significantly higher.

Today’s announcement sits alongside the government’s wider investment in buses. Earlier this year, it was announced over £100 million of additional support for the bus sector, including free bus travel for children aged 5 to 15 on participating services in August as part of the Great British Summer Savings Scheme.

This investment also includes funding for local transport authorities and bus operators to address rising costs in the sector, helping to maintain services and keep fares affordable. The UK government have today confirmed the individual allocations local transport authorities will receive.

The government recognises that affordable fares are only one part of delivering better bus services. They have already committed more than £3 billion for buses over the next 3 years, alongside significant reforms through the Bus Services Act 2025. These reforms give local transport authorities greater powers and flexibility to shape bus services around the needs of their communities, whether through franchising, enhanced partnerships or other locally led approaches.