In this article, we discuss the benefits of cycle to work schemes and share our top tips on how to set up a successful scheme.

Published 30 June 2021

Last updated 30 June 2021


Now more than ever, employers recognise that employee wellbeing is key to how well their organisations perform.

Cycle to work schemes, which are available through our Employee Benefits framework, have always played a valuable role in encouraging fitness. In the wake of a pandemic, helping your employees get into bike commuting and avoid crowded public transport is a real benefit, as reflected by the recent cycling boom. During the first lockdown alone, bike sales went up a whopping 63%.

The pandemic has made people rethink their work life balance, confront their fitness levels and change their routine and habits accordingly. Now is the time to think about implementing a cycle to work scheme if you haven’t got one already. It pays to plan before you put your scheme in place, so we’ve summarised everything you need to consider to set up a successful scheme.

How it works

Any employer of any size can get a cycle to work scheme up and running. Not only is it a highly valued employee benefit, but it is better than cost neutral – creating employer National Insurance savings for your organisation too.

Here’s how a cycle to work scheme works:

  • employers choose a scheme provider with an HMRC compliant scheme
  • promote your scheme to employees
  • employees choose their bike and/or safety equipment up to the maximum value allowed by their employer. Within the public sector, this is typically between £2,500 to £4,000
  • employees sign a hire agreement, with payment coming out of their gross monthly salary – that means they can save up to 42% on the cost through income Tax and National Insurance savings that would otherwise be due. Employers make a saving on employer NI on the amount of salary sacrificed
  • the bike and/or safety equipment can either be delivered to or collected by the employee
  • at the end of the loan period the employer either transfers ownership of the bike to the employee or the employee can buy the equipment, according to HMRC guidelines

Pick the right partner

Cycle to work schemes allow employees to buy a new bike and associated equipment without all the upfront costs and with the benefit of doing so out of their pay before tax and national insurance.

Any bike purchases need to comply with HMRC rules so it pays to work with a specialist scheme provider who can help you with this and make sure the administration runs smoothly.

When you are choosing your provider you need to consider:

  • do they have access to cycle retailers who offer a good range of equipment in the right geographical area for your organisation?
  • do they have experience in helping organisations of your size and in your sector?
  • what they can do to help you promote your scheme to your employees?

Make cycling attractive

If you want to maximise the number of people who cycle to work, it’s important to make this an attractive option for their commute. It is here that small investments can make a big difference to uptake.

Options include:

  • a dedicated area with good lighting where bikes can be stored safely (preferably under cover) will reassure employees that their bike won’t be stolen or damaged
  • changing facilities and lockers to allow people to change and store wet or damp clothing post-commute – the addition of shower cubicles also make a big difference
  • depending on how many people cycle to work, you may want to source someone who can come on site to help with running repairs

Inspire participation

Your support for cycling to work will help promote bike commuting to existing employees and new ones when they join. Good ways of doing this include cycle to work days or weeks which get more people in the habit, particularly in the summer where bike commuting is more attractive.

You can also use incentives and reward not just for seasoned cyclists but for novices, evangelists and everything in between, to reduce the number of people travelling by car to work or public transport. Training and buddy schemes can help new cyclists build confidence.

Consider flexible start and finish times which allow staff to cycle when the roads are quieter and fit in with childcare arrangements.

Find out more

The cycle to work benefit is available through our Employee Benefits framework. To find out more, you can visit our website.

Don’t forget, you can find a full list of all the commercial agreements we offer, alongside details of how we can help you build policy considerations into your procurement, in our interactive digital brochure.