Cyclescheme’s Freedom to Ride scheme boosts staff satisfaction, encourages a more active workforce and saves you money on employer NICs.
This year saw the biggest change to the Cycle to Work scheme in its 20 year history: the default price limit of £1,000 was, with certain provisos, dropped. Employees can now get a bike at any price and make savings on the whole amount.
Until now, employers were only able to offer higher-value Cycle to Work packages if they had their own consumer credit licence, authorised by the Financial Conduct Authority (FCA). Most employers used the Cycle to Work Group Credit Licence issued by the Government, which capped the credit limit at £1,000.
As of October, all Cyclescheme customers were upgraded to Cyclescheme’s new ‘Freedom to Ride’ arrangement, which gives employers the choice on whether to limit their own individual scheme or not.
We’ve compiled some compelling reasons below on why this switch offers so many positives for our customers, plus we’ve included a reminder of all the great benefits to running a Cycle to Work scheme.
Increased staff satisfaction
Raising the limit means that your staff aren’t constrained in their choices. Maybe they want a bike that simply has a higher price tag like a Superlight Brompton or a premium commuter like Cube’s Travel SL. Maybe they need a non-standard cycle like a handcycle. Or perhaps they’ve got their eye on accessories like a top-quality jacket or a super-tough lock. With Freedom to Ride, all these choices are open.
That’s great for them and it’s good news for you. Staff happiness is strongly linked to improved productivity.
More of your staff are likely to sign up to Cyclescheme without the £1,000 price cap. Your company’s cycling enthusiasts are likely to be on board already, but what about the majority, who don’t currently ride to work: the could-be, would-be, should-be cyclists? The facility to get a higher value bike can help break down the barriers that are stopping them cycling:
- I’m not fit enough. The prospect of cycling to work can be daunting if you’ve not ridden a bike for a while, particularly if you’re overweight or face a hilly journey. An e-bike is the obvious answer, but decent ones start at around £1,000 and go up from there. A well-made e-bike with a crank motor and the accessories you want for commuting can easily top £2,000 – Trek’s District+ 2 is a case in point.
- I live too far away to cycle. Again, an e-bike could be the answer. Another solution, which people may be unaware of, is to split the commute and cycle only part way. This is most practical with a good quality compact folder, such as a fully-equipped Brompton. The price of this will climb above £1,000 once mudguards, lights, and luggage are factored in. Folding e-bikes are even more expensive.
- I need a special bike. Handcycles and other special bikes almost always cost more than £1,000. They’re made in smaller numbers than conventional bikes, by smaller companies, and the designs are more complex. Higher manufacturing costs are inevitably passed on to the consumer.
- I need to drop the kids off on the way to work. A cargo cycle – perhaps an electric cargo bike – can replace a family car. Tern’s GSD is a compact e-cargo bike that will readily carry two children and luggage, but the RRP is around £4,000. It’s a big purchase that’s much easier to make if, through Freedom to Ride, your employee saves 25% or more and pays in instalments. Even unassisted cargo bikes have a high price tag: a Christiania box trike capable of ferrying up to four children around is over £2,000.
With Freedom to Ride, employees save 25-39% on the RRP of bikes and accessories at any price. That’s because the package value is deducted from gross salary, so is exempt from income tax and employee national insurance contributions. It’s also exempt from employer national insurance contributions, typically 13.8%, so you save along with your staff.
The more employees who use Freedom to Ride, and the higher the value of each package, the more money you’ll save in employer NICs. Five staff with £1,000 packages, saves you £690. Ten staff with £2,000 packages would save you £2,760 – a fourfold increase in savings! Everyone wins.
8 reasons to remind you why Cyclescheme is such a great benefit for your business
With any employee benefit, its in your interest to offer something that is relevant, popular and a great value-add to your employee’s lifestyle. It’s a win-win if employee activation benefits your business too.
Employees usually need a nudge in the right direction and a reminder to actually take advantage of what you’re offering them, so we’ve recapped all the reasons why you should make sure you’re openly promoting Cyclescheme in 2020.
We’ve already discussed the employer NIC savings and the positives of an unlimited scheme, both of which are pretty encouraging on their own.
But what we love is that studies have shown that the real benefit to running a Cycle to Work scheme is the clear impact on your workforce’s health and happiness. With heightened productivity, increased physical and mental wellbeing and lowered stress levels all reportedly sitting above 50%, we’re hard pressed to think of a reason why anyone wouldn’t encourage a Cycle to Work initiative.
Plus, with free marketing materials supplied directly to each of our employers via the MySchemes portal, we’re making it as easy as possible for you to effectively promote Cyclescheme with very little effort required. Definitely a win-win in our books.