The new daily commute

With everything starting to slowly open up, people are thinking about how they will travel to work in future. A popular way to get to work is by bike - it’s good for the environment, good for the body, and also good for the wallet. Here’s why…

Enter the cycle to work scheme!

The Government introduced the cycle to work scheme around 20 years ago. The aim is to encourage employees to make better lifestyle choices and lets the budding cyclist to spend up to £1,000 on bikes and equipment tax-free (hooray!).

With most employers, it’s an anytime benefit. So when you’re ready, you can sign up. Simple!

The money then comes straight out of your monthly salary, allowing you to immediately start saving on tax and National Insurance (NI) and get on your bike.

So how much is it?

For example, if you wanted to spend £1,000 on a bike, this is the cost breakdown (if you’re a basic rate taxpayer):

If your gross salary was £2,000 per month, you would normally pay £640 in combined tax (20%) and NI (12%). With the £83.33 salary you’ve ‘given up’, your monthly tax/NI burden is only £613.34 which means you’re saving £26.66 on tax. Cha-ching! That’s more money in your pocket for fun stuff.

At the end of the hire agreement, you then have the option to own the bike outright. This will vary between providers, so it’s worth double checking the rules.

Top tips

If you’re unsure of what to do, or where to find information think about the following:

• Ask a colleague – they might already know how the process works and can talk you through it.
• Log in to your online benefits platform (if you have one), but if you don’t, ask your HR representative on how to start the process of opting into the scheme.
• Don’t forget to read the Terms and Conditions of your Hire Agreement – there will be important information in there you need to be mindful of.
• Practise cycling on the roads – busy traffic can be quite scary so it’s worth going on a cycling course to learn new skills.
• Dress the part – make sure you have a helmet and attach lights to your bike. Safety is key!