The RDG, which represents train operators and Network Rail, said it was the smallest annual rise for six years.
Regulated fares, which include season tickets, are capped at no more than July's RPI inflation rate of 1%.
Unregulated fares, such as off-peak leisure tickets, can go up by as much as the train companies like.
RDG chief Paul Plummer said: "We know that nobody likes to pay more to travel by train, especially to get to work."
But he added that money from fares now almost covers rail's daily operating costs.
"This
allows government to focus its funding on building a bigger, better
network when the railway is becoming increasingly important at driving
economic growth, underpinning jobs, and connecting friends and
families," Mr Plummer said.
Under government rules, the rise in
regulated fares was restricted to no more than the Retail Prices Index
measure of inflation over the year to July, which was 1%. Over the long
term, RPI has tended to record higher inflation than the other measure
of rising prices, the Consumer Price Index, which was 0.1% during the
year.
'Simply unfair'
Martin
Abrams, of the Campaign for Better Transport, said more must be done to
achieve a "truly affordable railway" as fares have risen by more than
25% in the last five years.
"To avoid pricing people off the
railways, the train operating companies and the government need to work
closely together to provide fairer, simpler and cheaper fares through
flexible ticketing and making sure people are always sold the cheapest
ticket available."
Mr Abrams insisted it was "simply unfair" that
flexible ticketing has not yet been introduced, leading many part-time
workers to "fork out for five-day season tickets which don't give them
the same savings that full-time commuters get".
Rail Minister
Claire Perry claimed the government's decision to link regulated fare
increases to no more than RPI will save the average season ticket holder
£425 by 2020.
She added: "Our plan for passengers is improving
journeys for everyone. It's transforming the tickets people buy, how
much they pay for them, the trains they sit on, how quickly they arrive
and the stations they arrive in."
But Mick Cash, general secretary
of the Rail, Maritime and Transport union, said the rise was "another
kick in the teeth for the British passenger who is already paying some
of the highest fares in Europe to travel on clapped out and overcrowded
trains".
The increase would help ring-fence the profits of
"rip-off private rail companies who, once again, will be laughing all
the way to the bank".
The increases cover fares in England, Scotland and Wales. Northern Ireland has a separate structure.
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