UK rail fare revenue rises 8 per cent as government subsidy for operations declines

Credit: Office of Rail and Road (ORR)

Train fare revenue for Great Britain’s rail network rose 8 per cent to £11.5 billion between April 2024 and March 2025 compared with the previous year, according to the latest statistics from the Office of Rail and Road (ORR). Despite passenger journeys approaching pre-pandemic levels at 1.7 billion, fare revenue remains 12 per cent below pre-pandemic figures.

The rise in fare income contributed to a reduction in funding from the UK and devolved governments for the operation of the railway. Government contributions fell to £11.9 billion, down £0.9 billion from the previous year. Statistics show passengers in Scotland received the highest level of government support per passenger kilometre travelled compared with other regions.

Credit: Office of Rail and Road (ORR)

ORR’s Rail Industry Finance statistics provide a detailed breakdown of income, expenditure and government funding for the UK rail industry. Fares income increased by £0.9 billion year-on-year, adjusted for inflation, with regional journeys seeing the highest growth at 11 per cent. However, overall industry income slightly decreased to £25.9 billion, down 1 per cent (£151 million, adjusted for inflation).

Operational expenditure rose by 1 per cent to £26.0 billion, and excluding financing costs, expenditure was £23.5 billion, 2 per cent higher than the previous year. Government funding accounted for nearly half of the industry’s income at 46 per cent.

Investment in new and enhanced rail infrastructure and rolling stock reduced to £10.3 billion, a decrease of 4 per cent (£0.4 billion) on the previous year, with the majority allocated to High Speed 2 (HS2) at £7.1 billion. Private investment in the rail industry increased 27 per cent to £756 million, up £161 million from the previous year.

Dividends from public contracted train operators fell slightly. Ten of twenty operators paid a total of £164 million, down 3 per cent from the previous year, with publicly owned operators accounting for 12 per cent of this total. Rolling stock companies, or ROSCOs, saw net profit margins decrease by three percentage points to 19 per cent and paid £275 million in dividends, a reduction of 19 per cent (£64 million) compared with the previous year.

Will Godfrey, Director of Economics, Finance and Markets, said: “Taking stock of the national rail finances in our annual report, we welcome the continued recovery in fares income in the last year. But cost pressures and a lagged recovery in industry income compared to passenger journeys, explains why the reduction in government funding still leaves the overall subsidy substantially above pre-pandemic levels.”