It means that all seats are reserved, you cannot just get on with your pass. If you do that, the conductor will charge you a fee, which may cost more than reserving in advance.
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In most circumstances, you must purchase a ticket before you board a train. Most trains require reservations and you should not board reserved trains without a reservation. Passengers who do so are not guaranteed a seat and may be instructed to get off the train at the next station stop.
Most UK train operators leave seats available for customers without reservations (there is usually at least one carriage with unreserved seating). However, if there aren't any seats available you may be required to stand for part of your journey. Off-peak fares are valid for any off-peak train on that day.
Can you sit anywhere on a train? If the train company does not offer seat reservations on the train you are travelling on, the reservation ticket will specify the date and time of travel. In this case, you may sit in any available seat on the specified train, appropriate to the class of your ticket.
Some carriers don't provide seat reservations on all or some of their trains. This is common on regional trains, shorter routes and during peak travel times on commuter routes. On these trains you can sit in any vacant seat in the class your ticket is booked for.
Penalty Fare charges changed in England on 23 January 2023. Charges for travelling without a valid ticket are £100 plus the price of the full single fare applicable to your intended journey served by that train.
Your ticket is valid on any train within the time and route restrictions. Don't worry about boarding the train. Unless it's a special event, you won't be refused boarding without a reservation. The only exception is the 'Night Riviera' train from London to Penzance and Caledonian Sleeper services.