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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 the scheme can save up to 42% of the total cost of a new bike and scheme users save hundreds of pounds on their annual cost of commuting. Participants also have the option to pay the cost of a bike off over a longer period, typically a 12, 24 or 36-month period.

The scheme is the most effective mechanism for employees to obtain a bike and has to date helped millions of people adopt an active commute, getting people across the country to travel to work in a healthier and more active way.

The scheme is enormously valuable to employees, their employers and for their wider communities.

What contribution does the scheme make?

For employees

  • To date 2 million people have taken advantage of the scheme and more than seven in ten scheme users believe that post-pandemic the scheme is more important.
  • Since joining the scheme, over 80% of participants claim that they cycle every week, up from 40% since before joining the scheme.
  • Furthermore, over 70% of scheme users said that cycling has led to improved physical health, with 65% of participants also saying that it has contributed to improved mental health and wellbeing.

For employers

  • Employers recognise the contribution that the scheme makes to employee wellbeing, with almost 90% of employers claiming that the scheme has had a positive impact on their organisation in relation to employee wellbeing.
  • Moreover, a third of employers stated that offering the scheme has given them a competitive advantage in the recruitment and retention of staff, with almost half of employers agreeing that the scheme is integral to their organisation’s benefits package.
  • Employers also have a overwhelmingly positive perception of the future role of the scheme, with almost all expecting usage to increase or stay the same post-pandemic. Almost 40% expect to see greater uptake.

For Government

  • The Cycle to Work scheme supports government in a number of key policy focuses including health, decarbonisation and reducing the cost of living.
  • As the Gear Change strategy highlighted, cycling can prevent and manage more than 20 chronic conditions and diseases like cancers, heart disease, Type 2 Diabetes and depression. As such, now, more than ever, government should be looking to the Cycle to Work scheme as a proven mechanism for helping people to ditch a polluting commute for an active one.
  • The government has also committed to achieving Net Zero by 2050. As part of their decarbonisation agenda, they have announced plans in their recently published Ten Point Plan and Energy White Paper to invest in the increased uptake in cycling as a way of reducing the nation’s emissions. Plans include the construction of over one thousand miles of segregated cycle networks by 2025 in every town and city in England. Cycling training will be made available to every school child and adult who wants it with the aim of doubling cycling rates from 2013 levels. The Cycle to Work scheme will play a key role in supporting government to achieve these ambitious targets.
  • Furthermore, key priority for the government is exploring how to reduce the cost of living, particularly for marginalised groups in society, and ‘level-up’ left-behind areas and forgotten communities. The rising cost of commuting is increasingly putting a strain on those on the lowest incomes in our communities. Cycling to work offers a cost-effective solution for many workers within this group.

For retailers

  • Over half of surveyed scheme user 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%).
  • As such, the Cycle to Works scheme allows retailers to welcome more customers into their stores as the reduced cost of cycling allows a greater number of people to purchase a bike.
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