So what is the Cycle2Work scheme?

Cycle to work is an initiative set up by the UK government in 1999, it was set up to encourage people to think of cycling as a means to get to work or carry out short journeys.

All UK employers are eligible to run a scheme, and all employees of said business are able to apply.

With Cycle2Work you can save at least 32% on the cost of a new bike and accessories.

So what happens?

Basically you will need your company’s Cycle2Work code, you then apply to participating bike retailers for the loan amount required. They then contact your employer and once authorised (a couple of days) you will receive an email with all your paperwork. You then go and pick up your bike and accessories.

How do you pay it back?

So the payments for the bike and accessories will be taken out of your pay check.

But before tax

This means you will pay tax on less of your gross pay, therefore saving a minimum of 32% of the cost of the bike.

It’s really straightforward: employers buy bikes and lease them to employees to cycle to work on. You choose the bike and your employer recoups the bike cost though salary sacrifice (a regular reduction in your gross salary). This means you spread the cost, usually over 12 months, and make savings on your tax contributions; 32% for standard rate tax payers and 42% for higher rate tax payers. Your employer also makes a 13.8% saving on National Insurance contributions.

In summary…

If you want to buy a bike and your employer is running the Cycle2Work scheme, it’s the best way to save money on buying a bike. On top of the pre tax savings you are also able to take advantage of offers the retailers may also be running, bike trade ins etc.

The salary sacrifice is usually pretty low dependant on the loan amount, but I’ve seen bikes as much as £1000 purchased, and as little as £110.

If you’ve had a good or bad experience with Cycle2Work please leave a comment below.

Thanks for visiting, and keep pedalling healthy 💙🚵‍♂️