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How does the cycle to work scheme operate?

The cycle to work scheme is a tax-efficient, and on the whole, salary-sacrificed employee benefit, introduced in 1999 Finance Act, that provides a way of encouraging more adults to take up cycling.

The savings that individuals make through the cycle to work scheme improves the affordability of, and access to, cycling. Employees who participate in schemes run by Alliance members can save up to 42% of the total cost of a new bike and, on average, scheme users save over £700 on their annual cost of commuting.

What contribution does the scheme make?

Increasing participation in cycling:

  • To date over 1 million people have taken advantage of the scheme, which involves over 2,500 bike retailers and 53,500 employers.
  • The scheme has a track record of achieving behavioural change amongst those not currently cycling regularly. 64% of participants were either non-cyclists, novice cyclists or occasional cyclists before joining the scheme.
  • Similarly, those joining the scheme commute to work by bike on a regular basis. Two thirds of participants use their bike to cycle to work for the majority of their commuting (on at least three or more days).

Environmental impact:

  • The scheme is an effective mechanism for achieving a shift in behaviour towards sustainable travel. Two thirds of participants are cycling more than previously.
  • Nearly three quarters of participants (70%) have reduced the amount that they drive since joining the scheme.

Health Benefits:

  • The scheme makes a key contribution towards achieving the government’s policy objectives on public health by encouraging physical activity to become an integrated part of employees’ lifestyles.
  • 86% of employees participating in the scheme believe that cycling to work has led to health benefits.
  • Of those who had noticed health benefits, 89% believed that it had improved general fitness; 52% believed that it had contributed to weight loss; and 46% believed that it had contributed to them being less stressed.
  • Employers also recognise the contribution that the scheme makes to employee wellbeing with 77% of employers claiming that the scheme has had a positive impact on their organisation in relation to employee health. Over half of employers (56%) identified improving staff wellbeing as the main motivator for offering the scheme.

Employee engagement:

  • The scheme is a major tool for improving employee engagement and satisfaction. 56% of employers agree that the scheme plays an important role in staff engagement, emphasising the wider benefits to the workplace.
  • Employee productivity is also improved as a result of the scheme. 60% of employees participating in the scheme believe that cycling to work has improved their productivity at work.

Making cycling affordable:

  • The cycle to work scheme is an effective mechanism for those on lower and moderate incomes to be able to cycle to work, making commuting by bike affordable. Research has shown that 71% of participants are basic rate taxpayers.
  • Over half of respondents joined the scheme because they could spread the cost over a 12/18 month period (54%), or because they were attracted by the savings that it offered (42%).
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