Bike Buying Via Cycle to Work Schemes
If you’re in the market for a new bike but don’t necessarily have the finances, don’t fret. There are options out there that can help. One that saves you money whilst also providing financing is the Cycle to Work scheme. Introduced in the UK by the government in 1999, it has been steadily growing in popularity ever since.
In fact, it’s been used by over 1.6 million commuters working for over 40,000 different employers since it was introduced to “promote healthier journeys to work and reduce environmental pollution”.
How Does Cycle to Work Scheme Work?
The scheme works via salary sacrifice and it can save you between 25-49% on the price of the bike and bike accessories. The size of the saving depends on which tax bracket you are in. Work out your potential saving with this handy calculator.
Essentially, your employer buys the bike for you and you hire it back through a salary sacrifice (you save by not paying tax and NI on it – from gross not net salary). So you pay nothing upfront and then you pay the bike off in monthly installments.
At the end of the hire period you get the option to buy the bike from your employer (make a one off payment to the scheme provider), give the bike back, or enter into a new agreement to rehire the bike (paying a small deposit). A large majority of people decide to buy the bike at the end of the scheme to make the most of the savings.
You don’t technically have to ride your bike to work everyday, no one is checking up on it. However, you are encouraged to use the bike for part or all of your commute – the goal of the scheme is after all to reduce environmental pollution! But you can ride your bike at weekends too so you get plenty of enjoyment from your new steed.
If you leave your employer while the initial Cycle to Work salary sacrifice agreement is still in force, you’ll need to pay off the balance and usually the depreciated value of the bike too, if you want to keep it. You have the option to give it back to your ex-employer too.
Benefits of Cycle to Work Scheme to You
- You receive a massive saving on a new bike and accessories and cuts your commuting costs.
- It’s better for the environment as riding to work reduces your carbon footprint.
- As well as a bike, you can purchase accessories through the scheme, so you can also get a helmet, clothing, lights, tools etc. Everything that sets you up to get on the road.
- All schemes have a flexible upper limit on how much you can ‘borrow’. There used to be a £1k cap but the government removed that in 2019. Spend as much as you like, subject to your employer and the scheme provider’s limits.
- This bigger budget for the schemes also now allows you to purchase eBikes.
- The scheme also now technically allows you to buy two bikes – one to get from home to the station and one to get from the station to work at the other end!
Benefits of Cycle to Work Scheme to Your Employer
- It’s free for an employer to sign up. The only real ‘cost’ is the time it takes to set it up.
- It’s better for the environment as it helps reduce congestion in our towns and cities.
- More employees riding to work makes for a healthier workforce.
- Cut NI contributions by 15.05%.
- It’s a great incentive to offer employees, as it’s something that many actively request.
- Reduces parking costs.
What Cycle to Work Schemes are Available?
The scheme is delivered through a variety of different companies. Your employer will usually have chosen one but if they haven’t, or if you work for a smaller employer, you should be able to pick the scheme you want. Talk to your HR department about it to get things going. It a good idea to talk to the bike shop you want to buy from, as they might have a preference of scheme too.
Here are some of the main schemes to choose from:
- Cycle Scheme
- Green Commute Initiative
- Cycle Solutions
- Plus, there are schemes operated by bike retailers such as Halfords
Many direct sales brands, such as Canyon, are also signed up to one or more schemes so if you have your eye on one of those, get in touch with the brand directly.
Where to buy a bike from?
So you’ve found out which schemes are available to you, spoken to your HR department and started to narrow down bike choices. Where do you actually buy the bike from?
Most bike shops across the UK are signed up to multiple cycle to work schemes. If your preferred local shop is registered with a variety of schemes, it’s worth checking which scheme will offer the best deal for you as well as the shop. That seemingly small consideration will mean a lot to any shop, in particular a smaller local bike shop.
If you’re buying your first road bike and you need advice on which bike to buy, then check out the bike reviews in our gear section.