Under the plan, the standard daily Congestion Charge would increase to £18 from 2 January 2026 for vehicles entering central London on the day of travel or when paid in advance. A higher rate of £21 would apply for payments made within three days after travel, up from the current £17.50. This is sometimes referred to as the retrospective rate.
TfL argues the change is necessary to maintain the deterrent effect of the charge in the context of inflation and ongoing congestion in central London. According to the authority, congestion cost the capital £3.85 billion in 2024, equating to an average of £942 per driver.
In addition to the charge increase, TfL plans to replace the current 100% Cleaner Vehicle Discount, which applies to all electric vehicles and is set to end in December 2025, with a new tiered discount scheme. From January 2026, electric vans, HGVs and quadricycles registered for Auto Pay would receive a 50% discount, while electric cars would receive 25%. These discounts would halve again in March 2030.
The discounts would be applied automatically using DVLA data, removing the need for manual registration. However, the new system would require all discounted vehicles to be signed up to TfL’s Auto Pay service.
“The volume of electric vehicles seen in the zone means a continued 100% discount would lead to worsening traffic and congestion,” TfL stated.
The authority says the revised discount structure aims to balance support for cleaner vehicles with the need to manage traffic levels.
The proposals have drawn criticism from Logistics UK, which argues that the planned changes could penalise freight operators who have already invested in cleaner vehicles.
“It is vital TfL incentivise operators to decarbonise fleets and we continue to press for the continued exemption from the charge for electric vans and HGVs,” said Chris Yarsley, Senior Policy Manager for Road Freight Regulation at Logistics UK. “Operators have made significant investments moving to electric vehicles and they simply cannot afford to soak up additional costs.”
Logistics UK also warned that any increase in operating costs may ultimately be passed on to consumers through higher prices.
The Congestion Charge has been in place since 2003. TfL reports the scheme led to a 30% reduction in congestion and a 15% drop in circulating traffic within the zone. The latest proposals are part of ongoing efforts to meet the aims of the Mayor’s Transport Strategy, which targets 80% of trips in London to be made by walking, cycling or public transport by 2041.
Public consultation on the proposals is open until Monday 4 August 2025.
