London Congestion Charge Set for Major Changes in 2026
The Congestion Charge is a £15 daily fee that drivers must pay in Central London. Until 25 December 2025, it applies to all vehicles except EVs. From 2 January 2026, the charge will increase to £18 per day, and the full exemption for electric vehicles will end as well. However, EVs registered with Auto Pay will still get a 25% discount.
This is a significant change for PCO drivers who frequently operate in Central London. The new congestion charge rules will directly affect their daily profits. In addition, they will put drivers on a PCO car hire plan under extra stress to meet their weekly earning goals. As a result, the private hire industry will undergo a massive shift.
In this article, we will discuss the expected changes in Congestion Charge rules in 2026 and how they are likely to affect the industry.
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Article Highlights
This article covers:
- Key congestion charge changes in 2026
- Why change the congestion charge?
- What the changes mean for PCO drivers
- Importance of registering with Auto Pay, and more.
Key Changes Coming in January 2026
The basic daily charge will increase from £15 to £18. It is the first increase since 2020, and you must pay it by midnight on the day of travel or in advance.
The penalty for late payment is also becoming severe. Currently, you can pay £17.50 within three days after travel. After the new rules, the penalty will be £21.
Fully electric cars registered for Auto Pay will receive a 25% discount, reducing the daily charge from £18 to £13.50. Similarly, electric vans, HGVs, and quadricycles will get a 50% discount, paying only £9 per day. From 4 March 2030, these discounts will further drop to 12.5% for electric vehicles and 25% for other categories mentioned above.
The current rule of no charge between Christmas Day and New Year’s Day will remain the same.
The Purpose of Changes in Congestion Charge
The goal of Congestion Charge was to manage traffic in Central London. However, the increased adoption of EVs is starting to reduce its effectiveness.
TfL estimates predict over 2,200 more vehicles in the zone on an average weekday next year. That’s enough to cause congestion on key roads.
The Cleaner Vehicle Discount began in 2019 when approximately 20,000 electric vehicles were registered in London. That number has grown almost sixfold since then, with over 120,000 electric vehicles in the capital at present.
More vehicles qualified for free entry means more congestion.
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What do These Changes Mean for PCO Drivers?
The financial implications are significant for drivers who frequently operate in Central London. For those with petrol or diesel vehicles, the daily fee increases by £3.
This might not sound significant initially. However, when you multiply it across multiple days per week, the impact is substantial. If you enter the zone five days per week, your weekly costs rise from £75 to £90. That is a £15 weekly increase.
Annually, this adds £780 in new Congestion fees to your expenses. This money comes directly from your earnings.
Higher costs will also force difficult decisions. For instance, drivers will weigh which trips to accept and become more selective about routes going through the zone. This could affect ride availability for passengers and increase their wait time.
There’s another angle to look at the situation. As entering the zone becomes less appealing, fewer drivers could mean better earnings for those who bear the charge. In the end, it all comes down to how you look at the situation.
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Importance of Registering with Auto Pay
Auto Pay is a payment service that deducts the Congestion Charge and many other road charges automatically from your account. It minimises the risk of forgetting payment deadlines and subsequent fines.
Given its effectiveness, all PCO drivers should register with this service. However, it’s a must-have for EV PCO drivers to receive a 25% discount on the daily Congestion Charge from 2 January 2025. Using this service will mean you only pay £13.50 instead of the £18 daily fee. These savings can add up significantly over time.
How to Create an Auto Pay Account?
Creating an Auto Pay account is simple and involves the following steps:
- Go to the TfL website and register for a London Road User Charging account.
- Register for the Auto Pay service within your TfL account.
- Provide your personal and vehicle details as required.
- Link a valid credit or debit card to your account for automatic deductions.
Once you complete the registration process, wait for account activation, as it may take some time.
Also Read: Importance of an Auto Pay Account for Private Hire Drivers in London
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Conclusion
The 2026 Congestion Charge changes represent a major shift in how private hire drivers operate. The full exemption for EVs is gone and replaced by discounts. This indicates that traffic reduction now comes before emission reduction on TfL’s priority list.
For drivers on PCO car hire plans, this will bring added financial stress. However, those who plan their routes and driving hours smartly will still get a competitive advantage. Fewer drivers in the Congestion Zone will bring more frequent rides to those working in it. Moreover, driving an EV will still be financially rewarding compared to other vehicle types. So, keep these factors in mind and make your choice wisely.
Frequently Asked Questions
What is the Congestion Charge in London in 2026?
The Congestion Charge is a daily fee drivers must pay when entering Central London. It is currently £15 per day but will increase to £18 from 2 January 2026.
How much is the late payment penalty under the new rules?
Currently, late payment costs £17.50 within three days. Under the 2026 rules, the late payment fee will increase to £21.
Will electric vehicles be exempt from the Congestion Charge in 2026?
No. From 2 January 2026, electric vehicles will no longer be fully exempt.
However, EVs registered with Auto Pay will receive a 25% discount, reducing the charge to £13.50 per day.
Is it worth registering for Auto Pay as a PCO driver?
Yes, especially for EV drivers. Auto Pay ensures you avoid missing deadlines and allows EVs to benefit from the 25% discount. It also reduces the risk of expensive penalties.
Do the free days for Congestion Charge remain the same in 2026?
Yes. The zone will still be free between Christmas Day and New Year’s Day, as per current rules. The current active and inactive hours will also remain unchanged.
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