How to fix the Cycle to Work scheme

By Monica Scigliano
Friday, 18 October 2024
A big mixed group of people are cycling on a dedicated cycle path next to a busy London road
The Cycle to Work scheme works very well for those who are employed and earning more than the minimum wage, but it does have drawbacks. Photo: Adrian Wills
Minister for Local Transport Simon Lightwood has recently promised to review the Cycle to Work scheme. Senior policy officer Monica Scigliano explains some of the issues with the scheme and shares suggestions on how to improve it

For 25 years, the Cycle to Work scheme has allowed people to save money on bikes and experience the many benefits of getting to work on two (or three!) wheels.

In essence, the scheme allows people to purchase a cycle and other cycling equipment through their employer, with the cost typically spread out over 12-18 months and taken out of their paycheck. Because it’s deducted pre-tax, it allows people to save up to 42% on the purchase.

The scheme is a bit more complicated than that quick summary, and my colleague Rebecca has provided an excellent guide on how it works.

According to the Cycle to Work Alliance, more than two million people have used the scheme, with six in 10 saying they would drive to work without it, and two in three saying they’ve cycled more after using the scheme to get a bike. So, it has definitely had a positive impact. However, Cycle to Work has several flaws.

Limitations

Perhaps the biggest concern is that Cycle to Work is only available to people who are employed and making more than minimum wage (legally they can’t be receiving pay below minimum wage once the Cycle to Work payment has been removed from their salary).

This excludes students, those on low incomes, people working in the gig economy, those who are unemployed and retired people. These are the very people who would benefit most, both from a discounted bike and from a way of getting around which is much cheaper than driving or public transport.

They are also the least likely to already own a bike, with only 25% of households with an income below £15,000 having access to a bike.

Meanwhile, many people on high incomes can use the scheme to get a steep discount on their sixth or seventh racing bike – not exactly what the scheme was intended for.

Two women are cycling on a dedicated cycle path that's separated from the road. They are cycling next to each other and are smiling. One is on a cargo bike, the other on a hybrid
A lack of good infrastructure is one of the main reasons people give for not cycling. Photo: Joolze Dymond

The Cycle to Work Alliance has called for the government to remedy this issue by exempting the scheme from minimum wage regulations. However, that’s not a just or realistic solution – many people working a minimum wage job wouldn’t be able to afford a salary sacrifice even if it was allowed.

The Cycle to Work scheme also doesn’t allow users to purchase secondhand bikes. Personally, I prefer used bikes because they are more environmentally sustainable and tend to be less attractive to thieves.

The scheme is particularly disliked among the cycle retailer community. Many bike shops have stated that they lose money on the scheme and struggle to stay open as a result.

Alternatives

Any scheme which aims to increase access to cycles should be:

  1. Equitable, benefiting those who need it the most, and inclusive of all cycle types
  2. Easy to use, for both beneficiaries and retailers
  3. Not just used for cycling to work – cycling is an important mode of transport for lots of journey types
  4. Fair to retailers
  5. Complemented by other policies to increase cycling (more on this later)

Sustrans recently released a report which estimated that 1.9 million people in the UK would like to purchase a bike but can’t afford one. The report argues for vouchers which give people who are on low incomes or not employed a 40% discount on bikes and cycling accessories – similar to what they could get on the Cycle to Work scheme if they were eligible.

A scheme focusing on lower-income people would certainly be more equitable, and as Sustrans points out would result in far greater financial benefits for society than it would cost. It would be particularly beneficial for those who need an adapted or e-cycle, which are much more expensive than standard cycles.

However, being able to afford a bicycle is not the only barrier – or even the main barrier – keeping lower-income people from cycling.

Beyond bikes

A bar chart showing the reasons people give that would encourage them to cycle, by men, women and all respondents. Safer roads and segregated cycle lanes are the top two
Percentage of people selecting factors that would encourage them to cycle, or cycle more, by sex

The graph above shows which measures people say would encourage them to cycle or to cycle more. A more affordable bike doesn’t even make it into the top five. The most important factors are related to safety and convenience: safer roads, traffic-free infrastructure, and direct routes. Lack of secure storage is also a bigger barrier than bicycles themselves.

You can easily find a decent secondhand bicycle for less than £100, which would pay for itself in one month through savings on motoring costs or public transport fares. However, if you live in a one-bed flat, in an area with busy roads and no cycle infrastructure, you’re unlikely to purchase a bike – with or without a discount.

The exception to existing affordable bikes is e-cycles, which are significantly more expensive than standard cycles and may be risky to purchase used. Adapted cycles can also be prohibitively expensive.

It’s still important, therefore, to maintain and improve the Cycle to Work scheme. However, if the government really wants to see healthier, wealthier and greener communities, it should make cycling not only affordable but safe.

Commuting Utility cycling

Further reading