With petrol prices soaring, what better time to ditch the car and start cycling to work? Not only will you save money, but research suggests you’ll live around two years longer too. If your employer signs up to a cycle-to-work scheme, you get the added bonus of tax savings that substantially cut the cost of both the bike and accessories, such as a helmet.
Programmes that employers can join include Cyclescheme and Cycle Solutions. Employees can then effectively hire a bike of their choice from their employer. Payments are collected, typically over 12 or 18 months, from pre-tax pay, saving the employee both income tax and national insurance contributions. The employer can also reclaim VAT on the purchase price. At the end of the agreement, an employee can buy the bike outright for a “fair price”.
A savings calculator at Cyclescheme shows that someone earning £30,000 who buys a £400 bike and £100 of accessories through the scheme could save 39% on the full retail price. Do bear in mind, though, that if you leave your job you will have to pay off any outstanding payments in one lump sum.