NEW! Our Hero’s Journey tool can help you with your next step towards financial freedom - click here to try now.
Advertiser Disclosure

What’s the Cycle to Work scheme?

What’s the Cycle to Work scheme?
Image source: Getty Images


With rising tube and bus fares, parking fees, and congestion charges, it’s no surprise that an increasing number of people in the UK are considering cycling to work. However, the costs of a bike and cycling equipment can be prohibitively expensive for many people. This is where the Cycle to Work scheme comes in.

This scheme can help you spread the costs of your bike and accessories over several months without having to pay anything upfront. Here’s what you need to know.

Plot your path towards financial freedom with our Hero’s Journey tool!

MyWalletHero is here to help you learn about taking control of your money, whether that’s paying off debt, working towards a short-term money goal, or investing for your future.

This tool can help you understand the next steps on your journey – simply choose a goal that best describes your current interests to get started.

Cycle to Work scheme: What is it and how does it work?

The Cycle to Work scheme is a government initiative established in 1999 to encourage employees to use a bike as their primary mode of transportation to and from work. It aims to promote healthier lifestyles and reduce environmental pollution.

The scheme works by your employer essentially buying a bike for you to ride to work. You then hire the bike over a certain time period (usually 12 or 18 months) through salary sacrifice.

A salary sacrifice is an arrangement between you and your employer that changes the terms of your employment contract to reduce your entitlement to cash pay. This sacrifice of cash entitlement is usually in return for some form of non-cash benefit. In regards to the Cycle to Work scheme, the non-cash benefit is a new bike.

At the end of the hire agreement period, you have three options. You can:

  • Enter into a new agreement and pay a small deposit to rehire the bike
  • Buy the bike from your employer at an acceptable market value
  • Give the bike back

How much money can the Cycle to Work scheme save me?

The benefit of the scheme is that by forgoing a portion of your salary before it is taxed, you will pay less in income tax and National Insurance contributions. For basic rate taxpayers, this equates to a 32% saving off the cost of your bike. For higher rate taxpayers, you can save up to 42%.

You will not receive the actual savings in cash, of course, because the money is going towards the bike. But you will be getting a brand new bike from the start without physically paying a penny.

These schemes often come with many offers, including discounted bikes.

Do I qualify for the scheme?

Employers in the public, private and non-profit sectors can implement the Cycle to Work scheme for their staff. Those who wish to take part in the scheme must be paid using the PAYE system.

To take advantage of the scheme, you must first check whether your employer has signed up for the scheme. If they haven’t, you won’t be able to use it.

There are several Cycle to Work schemes currently available in the UK. Cyclescheme and Green Commute Initiative are two of the most popular. Bike retailers like Halfords, Evan Cycles and Chain Reaction Cycles also operate their own Cycle to Work schemes.

It’s worth noting that your employer may be signed up with one specific scheme. This could limit your options as you will only be able to use that scheme.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. MyWalletHero makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

How do I apply for it?

The first step is to contact your HR department to find out which Cycle to Work scheme your employer uses.  

Next, navigate to the scheme’s website to obtain a list of participating bike shops or online retailers. There, you can select a bike package that meets your needs and budget.

Finally, you make your application using your organisation’s name or code.

Your employer will be notified of your application. They will then review your request and, if you are eligible, pay for the bike and accessories.

The scheme will send you an email containing a redemption code that you can then use to collect or order your bike package from your chosen bike shop or online retailer.

Why cycle to work?

There are a lot of good reasons to consider cycling to work. It’s a great and fun way to get your heart pumping early in the morning, burn a few calories, and generally stay fit and healthy.

Plus you will be helping to ease congestion and reducing your carbon footprint.

Cycling to work can save you money on transportation costs: money which you can put towards other expenses, save for emergencies or perhaps invest for income or growth.

Are you making these 3 common investing mistakes?

These all-too-common investing errors can cause you to miss out on the long-term wealth-building power that shares can hold….

To help you side-step these pitfalls, and move forward on your path to wealth-building, we’ve created a free report, “The 3 Worst Mistakes New Investors Make”.

Just enter you best email below for instant access to your free copy.

By checking this box and submitting your email address, you agree to MyWalletHero sending you emails with money tips, along with details of products and services that we think might interest you. You can unsubscribe from future emails at any time. You also consent to us processing your personal data in line with our privacy policy, and our cookie statement. For more information, including how we collect, store, and handle personal data, please read our Privacy Statement and Terms & Conditions.


Some offers on MyWalletHero are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.