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What is the Cycle to Work Scheme? How does it work?

As the cost-of-living rises, over half of price-conscious employees are looking for a cheaper alternative to their daily work commute.

With an average saving of £750 each year (rising to £1,400 for those in Greater London) it's no wonder that more and more employees are choosing to cycle to work. 

For many people, the only thing stopping them from taking to the saddle is the cost of a bike and cycling equipment. However, employers can offer the perfect solution to their employees by introducing a Cycle to Work scheme.

Not only will it help to support your employees financially, with access to bikes at a reduced cost, but a cycle scheme unlocks numerous benefits for employees, such as encouraging a healthier lifestyle whilst reducing their carbon footprint.

Read on to discover everything you need to know about how to become a cycle friendly employer.

How popular is cycling to work?

During the COVID pandemic, the number of people cycling increased by 29%, and the switch to cycling looks set to continue.

According to the UK's cycling charity, Cycling UK, weekday cycling levels were 47% higher in 2022 than in the previous year. Of those who don't currently cycle, a third are considering doing so in the future. 

Our research found that between 2021 and 2022, more than one in ten commuters began cycling to work. One of the biggest reasons people are swapping four wheels for two is to help decrease travel costs - 46% of employees would rather cycle to work than spend money on travel or public transport.

With bikes increasingly being seen as smart investments to manage the cost-of-living, it's no surprise that it's predicted that there will be twice as many annual bike sales than new motor vehicle registrations by 2030.

What are the benefits of cycling to work?

As well as being a cheaper option for commuting with an average saving of £750 per year compared to driving a car, cycling to work can also lead to a wide range of benefits to employees: 

Active commuters are happier, more productive, and take fewer sick days than their car-driving colleagues
Over 80% of those we surveyed said that they felt less stressed after cycling to work
Swapping the car for cycling helps to reduce congestion and environmental pollution (e.g. emissions).

What is a Cycle to Work scheme?

A Cycle to Work scheme is a salary sacrifice benefit for employees that gives them savings on a bike and a range of cycling equipment. 

A salary sacrifice scheme is where an employee exchanges part of their salary for a benefit. Rather than paying tax on money earned and then buying a bike, the Cycle to Work scheme lowers the amount of income that employees can be taxed on by giving up part of their salary before paying tax.

As the salary sacrifice is taken from their gross salary before tax, it means employees pay less Income Tax and National Insurance Contributions (NIC). Plus, the employer will reduce their NIC bill too.

For example, with the UK's leading Cycle to Work scheme, Cyclescheme, employees can save between 23% and 39% on the price of a new bike and bicycle accessories and spread the cost interest-free.

How does a Cycle to Work scheme work?

Cyclescheme is free to join for both employees and businesses of any size from start-ups to organisations with a workforce of thousands. The only requirement is that employees must be paid via PAYE.

The employer chooses a Cyclescheme limit (e.g. the maximum an employee can request) and your employees repay the cost from their salary, interest-free over 12 months. To keep things simple for you, Cyclescheme handles the entire end-of-hire process.

Here's how Cyclescheme works:

  • ● Sign up and request: Employees create a free account and request an amount to spend on a bike and cycling equipment
  • ● Approve and pay: Your business reviews, approves, and pays for the employee's request
  • ● Time to redeem: Employees receive a Cyclescheme Certificate by email to redeem in-store or online at over 2,600 retailers nationwide  
  • ● Easy ownership: Once all salary scheme payments are made, employees can make a small one-off additional payment to keep their cycling kit.

What are the benefits of a Cycle to Work scheme?

As well as NIC and tax savings and up to 39% off the price of a new bike and cycle accessories, Cyclescheme also empowers employees to spread the cost interest-free from their salary before choosing an ownership option.

The cost savings don't end there. It's estimated that, for a three-mile daily commute, employees could also save £100 a year on fuel by swapping their car for a bike.

Plus, they receive 14 days of bike insurance at no extra cost, free access to Love to Ride, the home of cycling encouragement, and access to over 2,600 retailers across the UK.

The great news is there are multiple benefits for employers too.

Cyclescheme handles the ownership process, which cuts your administration costs and administration time. In addition, your business saves up to 13.8% in Employer National Insurance Contributions. 

Our research found that 49% of employees would be more encouraged to come into the office if their employer offered Cyclescheme, and cycling commuters take fewer sick days, which can save businesses £83 million annually.

As the UK's leading scheme for bikes for employees, you'll also get peace of mind that we adhere to HMRC and Department for Transport (DfT) Cycle to Work guidelines. Plus, the Cycle to Work scheme actively supports your green and Corporate Social Responsibility goals.

Ellie Harriss, HR Support Officer, Oxfordshire County Council says; Cyclescheme supports Oxfordshire County Council in aligning to our goals of being Carbon Neutral by 2030 and enabling our communities (which includes our staff) to become more active. Oxfordshire County Council cares about its employees’ wellbeing, and Cyclescheme provides more opportunity for staff to look after their mental and physical health.” 

Do employees have to cycle to work every day to qualify for a Cycle to Work scheme?

No, not at all. We know that over half of adult cyclists in the UK ride to stay active, keep healthy, and for recreation. 

That's why, although 50% of the bike and cycle accessories should be used for work purposes (e.g. commuting), an employee can also use their bike for leisure cycling, family cycle rides, and non-work purposes.

How much can employees spend on the Cycle to Work scheme?

To enable your employees to get the perfect bike for them, it is possible to offer a Cycle to Work scheme without limits. As an employer, you should consider your cash flow and your employees' eligibility to join the salary sacrifice arrangement before setting a limit.

Some employers choose to set a minimum spend, but again, it's entirely up to you to decide how best to help improve your employees' commute.

Where can employees shop with the Cycle to Work scheme?

As the UK's leading Cycle to Work scheme provider, Cyclescheme has joined forces with a huge range of bike shops and retailer partners. 

In fact, your employees can shop in-store, online, click & collect, and brand direct at over 2,600 UK retailers, including Canyon, Sigma Sports, Chain Reaction, Specialized, Evans Cycles, Tredz, Pure Electric, Whyte, Raleigh, Wiggle, Ribble, and Wisper Electric Bicycles.

What is included on the Cycle to Work scheme?

Cyclescheme gives your employees access to whatever they need to safely and securely commute to and from work on a regular basis. This includes the following cycle solutions:

  • ● Bikes, tyres, components (e.g. brake levers, groupsets), lights, frames, child seats, and cycle trailers
  • ● Safety equipment such as cycle helmets, cycle clips, bulb horns, dress guards, and bike reflectors
  • ● Cycle clothing, including reflective clothing
  • ● Secure bike storage tools e.g. bike locks
  • ● Bike maintenance items such as cycle tool kits and bike lube. 

Can employees get an e-bike on the Cycle to Work scheme?

A recent survey found that one in 20 people in the UK own an e-bike and 40% would cycle more if they had an electric bike. 

So your employees will be pleased to hear that electric bikes are part of the Cyclescheme offering, alongside e-bike conversion kits, road bikes, touring bikes, mountain bikes, and all variants of adapted bikes, recumbents, and hand cycles.

Can employees get more than one bike with a Cycle to Work scheme?

Yes, many Cyclescheme members opt to get an alternative bike to aid their commuting needs. For example, one popular option is to select a hybrid for the local commute and a folding bike for inner-city trips.

Just bear in mind that both of the bikes must be for the employee, for the purpose of commuting, and must be sourced from the same retailer. 

Want to help your employees switch to cycling to work?

As the cost-of-living rises, our research found that 85% of employers felt they have a duty to support their employees financially.

Introducing Cyclescheme as part of your employee benefits package will help reduce the financial burden whilst also boosting your employees' physical and mental wellbeing.

To find out more, get in touch today on 0208 159 9430, via our contact page, or by emailing