Cycle to Work Scheme 2026: Save Up to 42% on a New Bike

Your employer partners with a scheme provider (like Cyclescheme, Cycle2Work, or Green Commute Initiative). You choose a bike and accessories from a participating retailer, and your employer purchases it on your behalf. You then pay back the cost through salary sacrifice over 12 months (sometimes 18 or 24). Because the payments come from your gross salary before tax, you save on income tax and National Insurance. At the end of the hire period, you have options: return the bike, pay a small 'fair market value' fee to keep it (usually 3-7% of the original cost), or extend the hire. Most people pay the small fee and keep the bike.

Basic rate taxpayers (20% income tax + 8% NI) save approximately 28% on the cost of the bike. Higher rate taxpayers (40% + 2% NI) save approximately 42%. That's a massive discount on what's essentially a retail purchase. On a £1,000 bike, a basic rate taxpayer saves £280 — paying just £720 over 12 months (£60/month from take-home pay). A higher rate taxpayer saves £420, paying just £580 (£48.33/month). E-bikes, which typically cost £1,500-3,000, see even bigger absolute savings. A £2,000 e-bike costs a basic rate taxpayer just £1,440 through the scheme — saving £560.

The scheme covers bikes and cycling safety equipment. That includes the bike itself, helmets, lights, locks, mudguards, panniers, and waterproof clothing. You can also get maintenance packages and cycle-specific tools. E-bikes are fully eligible, including pedal-assist bikes up to the legal 15.5mph limit. Cargo bikes for family use are also covered. Some scheme providers have no upper price limit, while others cap at £1,000 — check which provider your employer uses. What's not covered: non-cycling clothing, fitness trackers, general backpacks (unless cycle-specific), or accessories for existing bikes. The equipment must be primarily for commuting to work, though there's no enforcement of this in practice.

Technically, the bike should be used 'mainly for commuting'. In practice, nobody monitors this, and HMRC guidance is relaxed. Even cycling to work twice a week qualifies. Beyond the scheme savings, cycling to work replaces commuting costs. If your current commute costs £100/month on public transport or £150/month on fuel/parking, switching to cycling even part-time could save £600-1,000/year. Add in health benefits, reduced gym costs, and the environmental feel-good factor, and the Cycle to Work scheme is worth it even if you only cycle occasionally. Many people find that once they have a nice bike, they cycle far more than they initially planned.

Check with your HR department or employee benefits portal whether your company participates in a Cycle to Work scheme. Most medium and large employers do — and if yours doesn't, suggest it, as it saves them money too (reduced employer NI). Browse bikes online first to know roughly what you want and what it costs. Visit a bike shop to test ride before committing — you'll be paying for this over 12 months, so make sure it's right. Apply through your scheme provider's website, get a voucher or certificate, and collect your bike. The whole process typically takes 1-2 weeks from application to riding your new bike to work.