The Cycle to Work scheme allows you to pay for a new bike and accessories through monthly salary sacrifices. Compared to simply walking in to a shop and buying a bike, you can end up saving up to 42%.
I imagine that by now most London Cyclist readers know about this. I’d like to hear from you in the comments (can be anonymous) about your company (again, don’t have to give the name of the company!) and whether they offer the scheme.
It will be interesting to hear what percentage of companies are bike friendly.
Some companies offer the scheme, but are more restrictive. There’s often only a certain time frame in which you can buy a bike. For example, another friend had to wait 6 months before he could get a bike.
Where I used to work, there was always talk of the scheme being introduced, but it never actually came around. I was always quietly nudging the human resources department to get the scheme introduced. My selling point is that healthy cyclists get ill less often, so we cost the company less money!
If you think your company should be offering it, then you can get companies, such as Evans Cycles, to get in touch with them.
We’ve previously written a guide for new cyclists detailing which bikes we recommend for people just starting out. In terms of accessories I would start with:
- Two bike locks (this is London after all) – Ideally an expensive D-lock (around £60) and a cable lock.
- A puncture repair kit
- A pump
- A pair of bike lights
- Mudguards
Leave a comment below..
Does your company offer the cycle to work scheme? If they do then did you get your bike through there or did you purchase it separately? How easy was it to take part in the scheme?
If your company doesn’t offer the scheme, do they have any plans to introduce it?
Look forward to reading your responses!
Both my current employer and my previous employer used a Cycle to Work Scheme. My current one (City-based) uses cyclesheme.co.uk where the vendors are independent cycle shops (seems pretty thorough in London). My previous employer (Surrey-based) used Evans Ride2Work (http://www.evanscycles.com/ride2work).
The tax advantages are the same in both cases, I think. But they (presumably the UK treasury) seem to have softened the advantage over time. As it currently stands, I think it’s definitely worth it for someone on higher rate tax, but less so for lower rates. Also, it seems to be a bit fiddly towards the end – and they don’t really make this clear in the FAQs. If the “rental” period is a year, then you get the option to buy the bike, but the cost of this is difficult to get in advance (I think I ended up paying 7%). They don’t really mention this, or explain it terribly well.
When I joined my firm, I had to wait three months for my probationary period to be up before I could sign up to the Cycle Scheme. And then there was a bit of delay in getting the voucher through, so I had to chase up HR several times.
In summary, I think it’s a fairly good scheme, but it’s quite fiddly, and I wish I had bought more accessories on the scheme, as I’ve bought more accessories since, and the cost mounts up.
Sorry, just to be clear, the 7% was at the end of the rental period, and on top of all the rental payments I had previously made. So it knocked down the % saving a bit.
My company (IMS Health) does not run a cycle to work scheme. They used to, but you had to buy the bike during one week in November, and from Halfords, so it wasn’t really much use anyway. Also we have recently moved offices from one where we had proper changing rooms, showers and underground bike parking to one where the bike parking is outside, although secure, and a rubbish shower in the disabled toilet. So I wouldn’t really call them cycle friendly.
My company uses Ride2Work via Evans. So far so smooth. There are two windows in the year and the voucher came through with no hassle, the salary sacrifice means not only is it tax efficient but of course you’re paying in installments as well.
My current company only uses the Ride2Work via Evans scheme. Bit of a pain if you want a specific bike which surprisingly Evans don’t stock!
Thing is my previous company before being bought out by my current employer allowed you to choose any bike from any bike shop which was part of the scheme.
Still have got 2 bikes out of the scheme so far and will probably be looking at a third in the next year…if my wife allows it!!!
Southwark Council do NOT run the scheme – used to though. Staff did question this but the council still refuses. There was a public question as to why this is so and you can see the respone under Q6 at http://moderngov.southwark.gov.uk/mgConvert2PDF.aspx?ID=27632
Not sure why Southwark take this stance when thousands of other employers seem to disagree.
Happy to take advice as to how this could be changed.
recently my working hours changed, which meant i was going to have to either catch a train or bus to work rather than the usual hours drive. i’d been thinking about getting a bike anyway and my wife wanted to start cycling with the kids & even luckier, she’s also my boss(!), so she signed us up to cyclescheme.
i managed to sort the paperwork out before her and got myself a specialized globe daily for my 12 mile round trip to work. i bought the bike at the tail end of summer, so didn’t think about a rain jacket/lights to see; all of which i bought recently. no savings there. remember to get ALL that you need for the coming months.
the scheme itself is a little confusing – i’m still unclear about the final payment/option to buy. apparently this cost is decided by my employer(?) and can sometimes outweigh the initial tax savings.
i’m now one of 3 at work who have signed up to get a bike – overall the process is pretty simple – it can take a while (probably our HR dept.), and the monthly payment shown on the cert. is before the saving! very confusing.
work has even talked of getting a bike rack installed in the carpark. my bike currently sits in reception! perhaps cyclescheme/etc should add that to the mix – a discounted rack to put your spangly new wheels?
we have no facilities at work, so it’s a case of ‘riding cool’ to work. a shower is never going to happen here…
i love my new commute & actually enjoy getting to work in under 25 mins. might be different in the colder new year months i guess!
When I joined my firm three years ago they were not involved in any scheme, so I took it upon myself to do all the legwork to set everything up, leaving very little for our CFO and HR department to do but agree to it. It was pretty straightforward.
I looked at a number of different scheme providers but chose cyclescheme.co.uk because they operate through independent retailers (got to support your local bike shop).
Getting my bike (2010 model Dahon Mu Uno) was really straightforward (although the three week wait for the voucher was boring) and since we joined the scheme, six of my colleagues have also got bikes. Not bad in a company of 17 employees. The storage and changing facilities at our offices are good, which helps. Two of us commute every day come rain or shine (or snow and ice), and I would class another two as regular commuters. The others do use their bikes on occasion, but are pretty ‘fair weather’ cyclists.
The monthly repayments on a £700 voucher amounted to around £15 per month (post tax benefit; I am a higher rate taxpayer, which makes the scheme pretty efficient) and I save £2.80 per day (avoided £4.00 on Oyster, but added £1.20 per day for laundering shirts, which I keep in the office). I broke even within less than a year, and am quids in now, even taking into account maintenance and repair costs on the bike.
I reached the end of my 18 month loan period last year and chose the most tax efficient method of paying a very small (~£60) fee and taking an extended loan of 36 months with zero repayments before the bike is truly mine. This does not prevent me from entering into another agreement for another bike with cyclescheme in the meantime. Which I may well do, and this time I will load up on accessories, which I foolishly forgot first time.
All in all I thoroughly recommend the scheme generally, and cyclescheme.co.uk in particular. You should save money, and will certainly get fitter and stay healthier, and I notice that my cycling colleagues are generally more lively and alert at work. The only thing to be aware of is that if you leave your firm during the 18 month loan period, the outstanding balance of the loan becomes immediately due and you lose out on the tax savings on this amount. A colleague decided to emigrate to NZ about three months into her loan and was rather shocked at how much she had to fork out.
Similar to Charles, my company uses cyclescheme.co.uk. When it was first introduced several years ago, it was great and definitely well worth it. However about 2 or 3 years ago, HMRC changed the rules (retrospectively) and added far more red tape and significantly reduced the long term savings possible. You can indeed save ~40% up front, but as the bike is technically leased, there are subsequent charges after the first year that steadily eat away at that.
As it currently stands, most members of my company’s cycle club now agree that people generally shouldn’t bother with cyclescheme as (for us) there’s only one enrollment window per year, the long term savings are minimal and there’s a lot of hassle from the scheme over susequent payment, tax liability, etc.
Instead, most of us now recommend finding a good shop (I like Sigma down Kingston Way) and then asking them for last year’s stock and/or negotiating a ~10% discount. You’ll get equivalent quality for approximately the same saving, you can buy it at any time of year, and you’ll actually own the bike.
After nagging at them for a couple of years my company have decided to go ahead and join the scheme. There is a short purchase window, but then only two suppliers, Halfords and a local shop. I eventually managed to get the residual value out of them and the payment would be 25% after a year. As a lower rate tax payer, with this little choice and this high a residual, it just wasn’t worth it for me. My advice is don’t let the company bean counters get involved! They would have saved the company money on employer’s NI contributions, but they have spoilt the scheme. No showers here or covered parking, so not much to recommend it to be honest. A shame really as this could have been really good for all concerned. Guess what? I work for the NHS!
I work for a university, and they do participate in the scheme, but I’m not sure whether I’ll be using it. I’m planning to buy a new bike next year, and expect to spend around £700-£800, but having read about the changes to the scheme, I’m not sure if it’s worth it. My LCC membership gets me a 10% discount at several bike shops, and payment in installments is not too hard to arrange either.
In terms of general bike-friendliness here, it’s virtually non-existent. No showers, no lockers, no secure parking. My bike’s locked up on the street; there is some covered parking in other bits of the campus but it fills up quickly. Given the number of staff and students who cycle here, I really would have expected better provision!
I work in Parliament which has just recently introduced the scheme for some staff, but not all – including me (there are different employers for different roles; hundreds, in fact, if each MP is considered an individual employer). The sticking point – as with the example given above in relation to Southwark Council – is the employee ‘buying’ the bike at the end of the scheme. While I understand private companies were selling the bike for a nominal sum, most public bodies have to get value for money for the taxpayer – it would be against their rules to sell a bike that’s worth hundreds for, say, £20 or £50.
Would be interested to hear from others in the public sector what sort of savings they have achieved in the end – I suspect certainly much less than the 42% quoted in the article.
Its a shame – otherwise Parliament has become more and more cycle friendly for staff. I think they should introduce cycle stands for visiting public, though the biggest barriers to that are security/logistics.
I use to have used bike or a 150 to 180 new in the last 5 years. One afer one year in my company they ask me to do some work at the head office. I decided you mention about the scheme and that I will like to do it if it is possible told them to have a look a the webside and see if they are interested in take part one it and to let me know. They never did contact me but I did. I have to insisted in a periods of two month to get them to sing up apruve the certificate and finnily paid for the cert yficate you be issue. All that was a atress periode just becouse they told me they will do it I insisted .
Now I got a beuty mondraker mountain bike really enjoy it 24/7 work to monday to friday I hot road tiresome week days and wekends change for a of road ones off to have.some fun in richmond or wimbledon common. I will never will afort a bike like that if will not be for scheme stress pay off
Am the only one at the firm to ise the scheme but all ready before a got the bike with the scheme combince 4 people from my work, you start cycling one give up and one is waiting 3 month with the scheme I warned him!! And other two they become freaks like me.
Head scheme is great !!!!! Is just the HR the ones that delays everythink.
I did it one year, but not again. My company is another that uses cyclescheme.co.uk and together with HMRC’s tightening of their end-of-term valuations, it’s made the savings close to negligible.
1. you don’t own the bike during the initial 12-month lease period.
2. after 12 months you have to either agree to a 2-year extension (followed by a 7% fee) or an immediate 30% fee to make the bike immediately yours – the cheaper 2-year extension means you still don’t own the bike for a total of three years. This might be ok, but it makes selling it out of the question – and it might make insurance claims a bit thorny.
3. you might not actually get a voucher, you might be forced to buy through an uncompetitive online shop, further eating into the ‘savings’
4. even if you get a voucher, the bike shop you spend it at will be charged (I gather from an LBS owning friend) approx. 10% of the face value, so expect some serious upselling and pressure to buy accessories and clothes with margins to compensate.
Some of these observations are cyclesheme.co.uk specific – of course, you’re also paying them as they’re a business too.
You do have the advantage of paying the sum off over 12 months and, even with the end-of-term fees, you will save a bit, but I’ve opted to do as others have suggested – take my money to spend it flexibly with my local bike shop who I know well and where neither of use wants to rip the other off.
I should have added that I approached one dealer before I was told of the two dealer limitation and they told me that as a small dealer they could not swallow the £45 admin fee and I would have to come up with that. The bike was full RRP too (£700). It was a specialised bike and these were the only UK importers so there was no point arguing.
My Company does not use the cycle scheme. Once the laywers and finces got involved there were too many objections, and with the residual value rules it doesn’t make it worth while at all. The system needs a complete overhaul.
Keep in mind if you are on the scheme, that as you have sacrificed salary, any other benefits indexed on you salary (pensions, bonus, etc) are also reduced. The scheme is much more favourable for the employee than the employee.
My employer (Rother District Council) participates in the scheme with Cycle Solutions (Wheelies) and has done since March 2010. All bikes and accessories come with 10% discount. All agreements are for 18 months and all warranties less than 18 months are extended to the same period. Until recently we could sign up at any time throughout the year but to make it easier for both employer and provider, it’s restricted to one month a year.
If you don’t wish to pay a final value fee after the 18 months we are allowed to hire the bike free of charge indefinitely. We can then at any time ask for a final value.
The scheme was started as a trial, but after it’s unprecedented success (me) my employer has committed to it long term. My story isn’t unique. I wanted a cheap bike for the odd ride around the park with the kids. However, I was super morbidly obese and probably the most unfit person at work. People were naturally expecting me to ride to work as it was a Cycle to Work scheme. My bluff was called. Two and a half years down the line I’m 8.5 stone lighter, I’m on my second bike on the scheme and I’ve cycled the equivalent of halfway around the world.
I’m not trying to steal this thread but you can see my story at http://www.youtube.com/watch?v=C4nSo3uTOEE
Well done Toby, 8.5 stone is very impressive. You haven’t made the video available for mobile devices so I can’t see it. There are those of us who use an iPad as our primary computer!
Youtube restrict it due to copyright of the song I chose. You can view it on mobiles if you view the embedded version on my blog. http://www.fatcyclerider.co.uk/2012/03/cycle-to-work-scheme-saved-my-life.html
Thanks Toby. I followed the link and watched the video. Well worth the time spent, it’s a good story and a really well taken video.
Company I work for have been incessantly pestered about joining this but always give the same response that it is unsafe to cycle on the roads therefore they do not promote such activities for employees.
Then in the next company wide work-fit promotions trot out the health benefits of cycling for employees…
My company does the Cycle To Work Scheme, but the benefits company they’ve outsource all that stuff to only allows a 2 week window every year where it’s possible to sign up for pension, shares purchase, Cycle To Work, etc.
I started 3 weeks after the window closed, so I don’t get to sign up until next year. Legal somehow.
I’ve just started cycling and wanted to ride to work. My old bone shaker is 18Kg so I would like a new bike. My boss won’t sign up to the scheme as he thinks people will use punctures as an excuse for being late. I’m going to go ahead and buy the bike on my own anyway. Are there any other schemes/tax breaks to recover any of the cost?
Sounds like you need a more enlightened and trusting boss.
Are you hiring? 😉