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Many bus passengers in England will face a one-way fare increase of £2 to £3 from Wednesday.
Leading campaign groups said it would lead to a “costly start” until 2025.
The old £2 limit was introduced under the Conservative government to cope with the rising cost of living.
The Department for Transport, however, said the money raised would help support travel in rural communities and towns where there is a heavy reliance on buses.
The new £3 cap, covering most bus journeys in England, will remain in place until the end of 2025.
Fares that would be below £3 without the cap – as is the case in urban areas – can only rise in line with inflation, which measures how prices change over time.
Buses are the most widely used form of public transport in Britain. But in recent years thousands of services have been cut due to severe funding pressure on local councils.
Outside of London, bus mileage in the year ending March 2024 was around a quarter lower than in 2005.
There was speculation that England’s bus fare cap would be scrapped entirely in Chancellor Rachel Reeves’ first autumn budget.
Silviya Barrett, of the Campaign for Better Transport pressure group, said the policy had proved popular with passengers.
Although the cap which was due to expire at the end of December was maintained, she said its increase to £3 was “significant”.
“The government must now seek a long-term replacement for this program from next year to avoid any further increases,” she said.
Local authorities have the power to keep the cap lower in their area if they subsidize it themselves or fund their own local transport programs.
For example, the cost of a one-way bus ticket in Northumberland, Tyne and Wear and County Durham will be capped at £2.50 from January.
It comes after North East Mayor Kim McGuinness said the project would be subsidized by the North East Combined Authority until December 2025.
In West Yorkshire the cap will remain at £2 until the end of March, after which it will rise to £2.50 for the rest of the year.
Single bus fares in London with Transport for London will also remain at £1.75 and Greater Manchester at £2. These regions are excluded from the broader rate cap because their funding is structured differently.
Alison Edwards, policy director at the bus and coach industry body the Passenger Transport Confederation, suggested that many people who use bus services would continue to pay much less than £3 per journey.
She said commuters and regular passengers often opt for cheaper memberships.
Many single fares on shorter routes will remain below £3, she added.
The Department for Transport said it would provide more than £150 million to help fund the cap this year.
The Bus Services Bill currently before Parliament will also place a duty on civil servants to ensure that every town in England and Wales with a population of more than 10,000 has a regular service operating seven days a week.
Local Transport Minister Simon Lightwood said buses are “vital” in helping people get to work, see a doctor or visit friends and family.
He said the Government was ensuring buses “continue to be an attractive and affordable way to travel”.
