In 2021’s tough economic climate, Cyclescheme makes bikes more affordable for your staff and saves your business money at the same time.
Whatever you think about Brexit, good or bad, the consensus among economists is that the UK economy will take a hit. The Government’s own analysis predicted a reduction in growth of 2-8% for more than a decade - the size of the drop dependent on whether there’s a deal and, if so, what kind.
On the back of challenging conditions caused by the pandemic, these are hard times for many businesses. One step you can take to soften the blow a little is to encourage more of your staff to sign up to Cyclescheme and start commuting by bike. It will help you. It will help them.
Cycling staff save you money. They’re more productive and take fewer days off sick than staff who drive or use public transport. They also save you money directly, because when they get a bike through Cyclescheme you pay less money to HMRC.
Cyclescheme works through salary sacrifice
The price of the employee’s bike is deducted from their gross salary, before tax and National Insurance are applied. That means you don’t pay employer NICs on the cost of the bike. It saves you 13.8% on every pound your employees spend through Cyclescheme. Or to put it another way: for every £1,000 spent by staff, you cut your HMRC bill by £138.
Cyclescheme saves your staff money too. They don’t pay National Insurance contributions or income tax on the price of the bike and equipment, which saves them 25-39% on RRP. While there’s still a cost involved versus not buying a bike at all, it’s a cost they’ll recoup because cycling is a much cheaper way to travel. Cyclescheme participants’ overall transport costs will fall the more they use their bike.
Cyclescheme provides affordability
Let’s not overlook bike purchasing costs. Bike prices have surged since the Brexit vote in 2016 as sterling tanked against the dollar. On 23 June 2016, sterling was trading at $1.50 to the pound. At the time of writing, it’s $1.35 to the pound. This matters because bikes are generally purchased by UK distributors in US dollars from their international suppliers.
Bike prices have risen much higher than the 10% or so increase you’d expect from UK inflation in this four-year period. The difference in the dollar-to-pound exchange rate is about 11%, so you might expect bikes to cost 21% more (10% inflation plus 11% currency changes). But it’s worse than that.
Let’s look a couple of examples. A Cube Travel Pro hybrid cost £699 in 2016. Now it costs £999. In 2016, a Giant Toughroad SLR 1 cost £899. It’s now £1,199. Both bikes are £300 more expensive, representing increases of 43% and 33% respectively. Such increases aren’t unique to Cube and Giant, but affecting the entire market.
With bikes now more expensive, the concept of saving 25-39%, and being able to pay in instalments, is an even bigger deal. Given that there are shortages of cheaper bikes, due to the welcome surge in cycling during the pandemic, your employees may have to get a more expensive bike to be able to get one at all. Cyclescheme makes these models, and the accompanying accessories, more affordable for all.
Ready to add Cyclescheme as an employee benefit?