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Getting up to speed with the Cycle to Work scheme

Submitted by Education on Tue, 13/11/2012 - 00:00

After a good year of talking about getting a second bike with more than one gear, I finally bit the bullet in August and invested in my Ridgeback Voyage 2012 tourer, courtesy of Bow Arts signing up to Cyclescheme. This is one of the organisations delivering the government’s Cycle to Work scheme, an initiative which aims to encourage people to travel to work in a more sustainable way through offering financial incentives to both employer and employee. One of the targets in the Bow Arts’ Environmental Action Plan is to reduce our carbon footprint through travelling in greener ways, so it made sense that we participated in this scheme. As the first employee who’s taken advantage of it, I’ve been the Bow Arts’ guinea pig; here’s an account of my experience.

It took me a while to work out exactly how the scheme functions and how it saves you money (partly due to changes in the scheme made in 2010, more about that later). But it’s actually quite straightforward. Essentially, you apply for a voucher from Cyclescheme with details of the make and model of bike and any other accessories you want, plus the shop you wish to custom. Cyclescheme take this application to your employer who, fingers crossed, pays the full amount. Cyclescheme send the voucher in the post to you or your employer. You then visit the shop to collect your bike. Simples.

As for the savings, they work using a principle of salary sacrifice. You pay back the money for your bike over a year in 12 equal instalments. As this is coming out of your salary, you do not pay National Insurance or income tax on this amount.  And this is where the saving is generated.

It’s important to remember that during the 12 month period officially you are hiring the bike from your employer. At the end of the year, you can gain ownership of the bike by paying a fee equal to 17 – 25% of the full value of the bike, and this is often where ambiguity around the scheme’s benefits lies. The current percentage is a fairly recent change (the final pay out used to be more like 5%) meaning that the savings made through the scheme are not always as generous as before (it depends on your tax rate and the amount you spend on a bike). In practical terms, it can also be quite a big sum to shell out in one go. Cyclescheme offer the option of hiring the bike from them for another three years by paying a more modest 3% - 7% fee, which is what I am going for*.

Now for some logistics. I would recommend, where possible, ensuring that the shop has the precise bike you want before you apply for your voucher. I paid a refundable £50 deposit to get my bike in, test rode it to make sure it was ‘The One’ and that it fitted me, and only then applied for the voucher. This process took about a week. I had to phone the shop a few times to assure them I would be back soon with the readies but I had the peace of mind that it was definitely there. A friend had to wait months for a new bike after she’d already cashed in her voucher with a shop that had run out of her size of the model she wanted. She spent ages chasing up the company who were not hugely helpful in offering alternatives.

Perhaps more complicated than Cyclescheme is choosing the bike itself. It wasn’t an easy decision as I think it’s the most amount of money I’ve invested in anything physical, and there are so many options to consider. My own dilemma boiled down to speed vs comfort; do I go for a steady, steel-framed tourer or a sleek, lightweight but less practical road bike? There was also other people’s advice to bear in mind; these ranged from the whimsical (‘a silly colour scheme is a must’) and the philosophical (‘the right bike will choose you’), to the pragmatic (‘it’s a good idea to test ride a few’).

I can’t deny it wasn’t a scary moment when I actually made the decision to go for the tourer. However, in the end it was a lot of talking, a few test rides and a bit of opportunism (the Voyage was on sale) that led to my final decision to pick that bike. Heavy, yes, but still much more efficient than my undersized single speed pub bike. As well as using it to cycle to work, I’ll be able to whack a couple of panniers on it and hit the roads in relative comfort which was hugely important to me (I have a coast to coast and Belgium trip on the cards next year). And the steel frame means it should last me for years.

So despite the changes to the scheme, I’d still recommend it. It’s a good idea to spend some time researching what kind of bike you want as well as getting transparent information about the final pay out figure and how much you’d actually save. Ultimately, however, it can enable you to spend a bit more on a bike than you’d be able to pay up front. A great result.

Lydia Ashman, Education Officer

* The final payment would have been around £200, which negates a large proportion in the tax/NI savings, but it will now be more like £60

My bike in Victoria Park, which I pass through on my commute