Compensation payments to rail passengers for delays or cancellations will be made in cash for the first time - and are set to rise.

Under the Government rules, train companies will be forced to refund 25% of the ticket price for delays exceeding one hour, and 50% for trains more than two hours behind schedule.

Under the existing compensation structure, passengers are only entitled to a voucher for 20% of the cost of the delayed leg of their journey.

Significantly, passengers will be able to insist on cash payments rather than vouchers.

The benefit is that they will be able to spend the refund as they like, and not have to use it towards another journey with the same company.

Research shows that many passengers fail to use their vouchers, saving firms millions of pounds.

Under the revised rules, the rail companies will also have to give a light snack and a drink to passengers whose journeys are delayed by 60 minutes or more.

Rail firms say the new cash compensation rules overall would cost them £6.9m a year in claims.

Source: thisismoney.co.uk