True cost of commuting

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An average of 3.2 per cent has been added to season tickets, although the true cost of travelling to London is much higher than the price paid to the rail companies.

The growing finance pressures of commuting mean an increasing number of people who work in London are now trying to find jobs closer to home.

“We are constantly dealing with people who are currently working in London but don’t want to do it anymore,” said Gerrard White, who runs his recruitment consultancy in Lonsdale Gardens Tunbridge Wells.

The price of an annual Southeastern pass from Tunbridge Wells to London now sits at £4,792, up £150 compared to last year. For those needing to use the Underground to get to and from work, you can expect to pay more than £5,500.

However, the actual cost of getting into London is more than just the price on the front of a ticket, as accountant and director at Tunbridge Wells-based Synergee, Darren Austin, explained.

“You need to take into account income tax, employees’ national insurance and, possibly, pension contributions,” said Mr Austin.

“Assuming you earn more than the annual personal allowance of £11,850, the rates are 20% tax, 12% NI (National Insurance) and 3% pension. If you earn over £46,350, these change to 40%, 2% and nil for the pension.”

He calculated that when income tax and NI (but not pension contributions) are taken into account, commuters wanting to get into London every day have to earn £7,036.71 to cover the cost of a season ticket. This rises to £8,249.93 for higher rate tax payers.

To meet the £4,364 annual cost of travel from Tonbridge to London, season ticket holders need to earn £6,417.65, and higher rate payers, £7,524.14.

Things are worse for travellers needing to use the Tube. A season ticket from Tunbridge Wells to London stations including Travelcard Zones 1-6 now sets you back £5,508, meaning the gross pay cost is £8,096. Higher rate payers have to fork out £9,491.

Tonbridge commuters face a pre-tax salary cost of £7,476.47 to pay for their rail and Tube travel card of £5,084, while higher rate payers need to earn £8,765.

When you factor in parking, which currently sit at around £1275 a year, the cost of your travel to work could be a staggering £11,696 for higher rate payers when tax and NI is taken into account – and even more if you pay into a pension.

To put the figures in perspective, the annual median income in the UK is £28,677, which means for somebody on an average salary commuting from Tunbridge Wells to London every day by rail and Tube, their yearly wage drops to just £21, 577 once travel is taken into consideration – 28 per cent of gross salary – nearly a third of their income.

While the cost of most fares are set by train companies themselves, 40% of fares in England, Scotland and Wales are regulated, and the current rise is pegged to the RPI (retail price index) rate of inflation.


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