Photo by Photos of Korea on Unsplash
As summer hits its peak, there’s no better time to get involved in the annual Cycle to Work Day, taking place on August 1st. This initiative encourages people to swap their car keys for bike helmets, promoting the benefits of cycling, including the significant cost savings and improved health on offer.
In May 2024, private plate specialists Regtransfers published an article around Walk to School Week, revealing that families could save over £400 a year – and reap serious health benefits – simply by walking all, or part, of the way to and from school. In a similar vein, Cycle To Work Day provides yet another perfect opportunity to weigh up the potential benefits and savings on offer as a result of changing from car to bike for your work commute.
How much money could you save by cycling to work?
Unless you’re working fully remotely, the majority of UK employees travel further to their place of work than children do to school. As a result, the potential for saving on fuel, parking, tyre wear and other car-running costs is greater. Some journeys will be too far to be practical by bike, of course, but a 2022 survey by Project Solar showed that three quarters of the UK’s employed population travel around 10 miles or less to work.
In 2022, Cyclescheme estimated that cycling to work could save you £750 per year. Not long after, that figure increased to an impressive £1,262 annually. These savings come from reduced fuel costs, lower vehicle maintenance, and fewer parking expenses. Essentially, the further you cycle, the more you save.
What are the health benefits of cycling?
Beyond the financial perks, cycling offers numerous health benefits. Peer-reviewed studies highlight that cycling helps maintain a healthy body weight, reduces blood pressure, and lowers the risk of cardiovascular disease by 24% and cancer by 16%.
Mentally, cycling can reduce stress, improve sleep, and enhance overall well-being. It’s a full-body workout that promotes fitness and boosts your mood, making it a win-win activity.
What is a cycle to work scheme?
For the past 25 years, the UK government has backed schemes encouraging people to cycle to work. Poor fitness and lack of exercise has been earmarked as an aggravating factor to the increasing load placed on the already-struggling NHS, and cycle to work schemes offer a solution beneficial to the population’s health. What’s more, these schemes also reduce traffic congestion, pollution and emissions – all key elements that can help drive the country toward net zero.
Cycle to work schemes offer a means of getting a bike and associated accessories through an employer, who signs up to the official scheme. In theory, everyone benefits from involvement – you, your employer, the government and the NHS.
Benefits to you
Amazingly, using a cycle to work scheme could see you save up to 42% on the cost of a bike and accessories, spreading the cost over time. You can also get the cycle and accessories of your choice.
As mentioned, cycling to work could see you saving money on car fuel and wear and tear on your vehicle. Beyond this, you’ll benefit from improved fitness, wellbeing and overall health.
Benefits for your employer
There’s no cost involved in signing up to the scheme, and your employer could save up to 15.05% in National Insurance contributions for every participating employee.
On a more “everyday” level, more employees cycling means less need for employee parking facilities, and a fitter, healthier workforce who, in theory, will take fewer sick days; studies show that people who cycle to work on a regular basis take, on average, 1.3 fewer sick days per year!
Benefits for the Government
As previously outlined, the reduced load on the NHS and reduction in pollution and emissions is a serious benefit to the government, thanks to less traffic and congestion. There’s also the reduced wear on road surfaces to consider, which may save taxpayers forking out for roadworks and repairs.
How does it work?
Cycle to work schemes are a form of “salary sacrifice” – you get a benefit in return for a manageable sum that’s regularly deducted from your salary. In the case of Cycle to Work, the benefit is the bike.
Essentially, your employer would buy the bike up-front, and you hire it from them over a fixed period of (usually) 12 to 48 months. At the end of the hire period, you will have the chance to buy the bike from your employer at an appropriate price. That price could be up to 25% of the cost of the bike and any accessories you acquired through the scheme.
The deal is a fair money-saver overall as, under the scheme, you will pay less tax because of the salary sacrifice element. If your gross salary is £1,500 and your salary sacrifice is £100, you won’t pay income tax on that £100, as it comes out of your pay pre-tax. This means you’d pay tax and National Insurance on £1,400, rather than £1,500.
Over the period of the scheme, the tax savings and total paid for bike rental and final purchase works out to save you money on the price you would have paid had you bought the bike without the scheme. That saving can be up to 42%, although it depends on the individual circumstances. There are savings calculators out there if you’re curious to crunch some numbers.
How can you get started?
Check with your employer to see if they have a cycle to work scheme; these days many, if not most, do. If they don’t, tell them about the benefits and ask if they’ll consider signing up. They may thank you for it!
If your employer is already on board, the process will go something like this:
- Check with your employer to see if there is a limit to the price of bike and accessories under the scheme. Some are capped at £1000, some have no limit.
- Pick the bike you want and the accessories you’ll need, such as a helmet, lights etc.
- Tell your employer the cost and, if they ask, the details of what you want to buy.
- Take your voucher to a participating retailer and exchange it for your bike and gear.
- Your employer will arrange your salary sacrifice payments.
A bicycle may not replace your family car for longer journeys, collecting the weekly shopping, trips out with the family or travelling in wet weather, but it can certainly offer a great alternative when the distance is reasonable. Ask your employer to consider signing up, give it a try and experience the financial, physical, and environmental benefits of cycling firsthand.
