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Cycle to Work: why it’s a great option to buy your next bike
Cycle to Work is a great way to save on the cost of a new bike and the accessories you need to ride it like a helmet and lights. Here at Pearson we work with a wide range of cycle to work providers and can help you get the right bike for your needs.
That’s no longer just lower priced bikes and there are a lot fewer restrictions on what you can buy, how much you can spend and how long you have to pay for your bike than when the scheme was established by the UK government in 1999 “to promote healthier journeys to work and reduce environmental pollution”.
The Department for Transport’s Cycle to Work guidance for employers states that: “The Government’s ambition [is] that cycling and walking are the natural choices for shorter journeys, or as part of a longer journey”. We’d wholeheartedly endorse that.
It’s reckoned that almost 200,000 people a year use the scheme and by 2019, over 1.6 million employees at 40,000 companies had taken advantage of Cycle to Work, a number that has grown hugely over the last three years as cycling has become the preferred method of commuting for many people since the Covid-19 pandemic.
Cycling UK estimates that up to 5 per cent of all commutes in England were by bike in 2020, although that’s still way lower than other European countries; 25 per cent of all commutes in the Netherlands are by bike, according to Cycling UK.
The Cycle to Work scheme initially restricted purchases to a total of £1,000. For a new cyclist who wanted to buy lights, a helmet and other accessories that increasingly limited the range of bikes that would fit below the ceiling.
The increase in bike prices since 1999 and the advent of electric bikes, which can now also be purchased under the scheme as an alternative to pedal-only power, made that £1,000 budget increasingly unrealistic and the upper cap on prices was removed a few years ago.
Without a cap, specialist options like Brompton folding bikes, which we sell, are within reach, including the Brompton Electric if you’re looking for an electric bike. We’ve got a range of other commuter bike and city bike options and all the clothing and accessories you need to go with your bike in our Urban Collection as well.
Cycle to Work scheme providers, as we’ll explain later, may have their own caps on how much you can spend - the Green Commute Initiative lets you spend up to £10,000. You also need to think about affordability and the effect on statutory sick pay and other state benefits and your employer too may set a ceiling on the cost of the bike.
How do you sign up for Cycle to Work?
The Cycle to Work scheme involves you, your employer, your bike shop and a scheme provider to get you riding, spread your payments for your bike and reduce the tax bill for you and your employer.
First up, check which cycle to work scheme providers your employer works with – it’s usually administered by your HR department. Often firms will be signed up with several different schemes. If your employer isn’t registered, you’ll need to ask them to sign up with a scheme.
Next is the fun bit: choosing a bike and the other equipment that you need. It’s a good time to come into our store and talk with our staff, but you can also select a bike and other kit from us online. You can book an appointment online to talk to our staff too, if you have any queries.
Once you’ve chosen and reserved your bike with us, you’ll need to go back to your employer and ask for a Cycle to Work voucher. Bring this to us along with a photo ID and you can take delivery of your bike. We are paid by the scheme provider.
Your payments for the bike are then deducted from your pay for your chosen time period. Technically you’re leasing the bike for the period set up, but scheme providers will have options to own the bike at the end of the lease, as we explain later.
What are the financial benefits of Cycle to Work?
The main financial benefit to you of buying a bike through the Cycle to Work scheme is that your payments for the bike are made through salary sacrifice and are net of tax and national insurance.
How large a benefit that is will depend on your salary level and current tax and NI rates. Most scheme providers have an online calculator, like that on Cyclescheme’s site. If your salary was £25,000 and you bought a £2,000 bike and accessories package, for example, the net cost to you would be £1,500, so you’d pay £113.33 a month over four years and save £500. That’s not counting savings on fuel or public transport.
Depending on your finances, Cyclescheme suggests that you could save between 25 per cent and 39 per cent on the cost of your bike. For the highest earners, the savings could be even greater.
There’s a benefit to your employer as well, as it reduces the level of employer’s National Insurance contributions it has to pay.
What other benefits are there from Cycle to Work?
As we mentioned above, the government set up Cycle to Work to help promote healthier journeys as well as reduce the level of pollution from car journeys and congestion. Our boss, Will, set out the golden opportunity for cycling and the benefits for riders and the community in a post from a couple of years ago. There are benefits for your mental wellbeing as well. If you’re not sure you want to mix it with traffic on main roads, read our post on how to keep your commute interesting, which has some tips for finding quieter routes.
You’re not limited to a flat bar hybrid or folding commuter bike under the scheme either. There’s no reason why you can’t buy one of our road bikes or gravel bikes and you don’t have to use your bike just for commuting. There’s no-one going to check that you’re riding your bike in to work, if it’s just too nice for the daily commute, despite the government stipulating that at least 50 per cent of a bike’s use must be for work purposes.
What happens at the end of the hire period?
There are normally three options once your contracted hire period for a bike has ended.
First, you can hand the bike and other equipment back to the scheme provider. If you want a replacement bike, that will be under a new Cycle to Work agreement.
Second, you can buy the bike from the scheme provider, who will charge an ownership fee based on the initial value of the bike and how long you’ve owned it. It’s often 7 per cent of the bike’s initial value.
Finally, you can extend the hire agreement or enter into a new hire agreement for the same bike and keep riding it.
Arrangements do vary by provider. Cyclescheme takes a deposit at the end of the initial lease period which is based on the bike’s value. It transfers ownership to you when the bike is four years old. It also lets you pay a larger value at the end of the tax-free period to own the bike immediately.
Other providers offer longer term arrangements and some will transfer the bike to your ownership at the end of the period for a nominal fee. Check out the Green Commute Initiative’s ownership option.
What else do you need to consider?
It’s worth noting that you’ll be liable for the bike if it’s lost or stolen, so it’s well worth buying insurance. Buy a bike from us and you can get 30 days of free insurance for your new bike and accessories through Pedalsure.
Since you do not actually own the bike, you need to confirm to the insurer that it’s a bike covered by the Cycle to Work scheme and who the scheme provider is.
You’re also going to need to pay for the maintenance and servicing of your bike and any parts that need replacing while you’re riding it. There’s plenty you can do yourself to keep your bike serviced at home, or you can book a service with our workshop from £65 or have us carry out smaller repairs and maintenance jobs for you.
Who does Pearson work with for Cycle to Work?
We work with a wide range of Cycle to Work providers here at Pearson, so you can choose the one which works best for you, or use one of your employer’s preferred providers. We are signed up with:
- Green Commute Initiative
- Halfords Cycle2Work
- Cycle Solutions
- Bike2Work Scheme
- Evans C2W
If you’re interested in buying a bike from Pearson under the Cycle to Work scheme, then please do get in touch. We have more information on our site and can offer you advice and guidance in person to help you choose your perfect bike for your commute and make sure that it’s set up correctly, along with all the accessories that you need.
Contact us on our online Chat or email email@example.com