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This is the big one, the bit they don’t seem to want you to know. If you have a family and friends railcard then it is often cheaper to use it, along with paper tickets, rather than use individual Oyster cards. You can use the railcard after 09.30 Mon-Fri, plus anytime weekends and public holidays.
Unfortunately the January 2011 fares revision has complicated the sums in this area as the price cap for children is different to the travelcard rates. A zone 1-6 off-peak paper travelcard will cost an adult £8 which is reduced to £5.30 with a railcard. For a child the paper ticket costs £3 and with a railcard this becomes £2, but the off-peak child cap is only £1.30. So for 1 adult and 1 child the paper zone 1-6 travelcard with a family and friends railcard will cost £7.30 but the off-peak price caps on Oyster will be £9.30 but if 4 children are travelling with the adult the paper cost becomes £13.30 against £13.20 on Oyster. However, if the kids have Oyster cards then it is cheaper to let all but one of them use them while the other one gets the adult(s) the discount(s) on their paper tickets.
If you wish to make a simple return journey then again you will have to do the sums. The adult fare with a railcard is discounted by 34% and rounded to the nearest 5p while the child fare is dicounted by 61% and rounded to the nearest 5p. There is a minimum child fare of £1 but that compares favourably with the child off-peak price cap on Oyster of £1.30. For single journeys the Oyster prices are likely to be cheaper unless you are travelling in the evening peak. For shorter return journeys the paper ticket prices will often be cheaper while for longer journeys Oyster can be cheaper. The paper ticket prices again become more competitive if one journey is within the evening peak and are likely to be cheaper for all journeys if both legs are in the evening peak.
You also need to remember that children aged 5-10 travel free with a zip oyster card as long as the journey is entirely on TfL-rail lines (see definitions).