At 20 years old, Cycle to Work is one of the most successful employee benefits schemes, providing a number of business advantages, explains Gary Webb.
09 January 2019 | Gary Webb
Financial savings for employers
Cycling reduces costs for businesses in relation to company cars and business trips. Every kilometre covered costs between 40p and 60p, when all the costs are added up.
With an average mileage of 15,000km in business travel made every year, it can cost between £5,000 and £8,000 a year in business travel. If a small company with 20 employees and eight company cars shifted just 10 per cent of its business trips to bicycle, they would achieve savings between £10,000 and £15,000 a year.
Bikes are also smaller than cars. You can park six or seven bikes in one parking space. As such, bike parking facilities require less space and can often even be set up in places where a car park isn't possible.
Cyclists are absent from work due to illness up to 50 per cent less than those that drive. In the UK, where we lose over £77 billion a year to sickness, one sick day fewer a year equates to £4 billion worth of productivity gains to the economy.
Research from Cyclescheme reveals that when employees arrive at work after a delay in their commute, there was a disruptive knock-on effect. More than half of employers said staff lost time and 46 per cent were noticeably less productive after a delayed commute. These results were in contrast to cycling, which lost 32 hours of time owing to delays over a year.
A third of the employers said cyclists were more productive at work. In addition, 44 per cent described staff who cycled as more efficient and 89 per cent said they were more energised.
A recent study by the Social Market Foundation suggested that 40 per cent of employees in the UK experience stress that they believe reduces their performance at work. As cyclists are fitter in mind and in body than other commuters, businesses can enjoy greater productivity from employees who travel by bike.
Health and fitness
Cycling on average burns as many calories as jogging, with considerably fewer negative impacts on the joints.
Cycling improves cardiovascular and aerobic fitness, lowers blood pressure, boosts energy, builds muscle, and improves coordination.
When you add up the cost of running a car, including insurance, tax, fuel and repairs, commuting to work can cost over £9,000 a year. Conversely, buying a bike and maintaining it for the same period costs an average annual total cost of £396.
The principle saving to be gained using the Cycle to Work Scheme is that the payments are tax-exempt. So, exactly how much is saved depends on what tax bracket the employee is in. Either way, you get an interest-free loan for a year, which is handy for anyone.
How the Cycle to Work Scheme Works
1) Your employer joins the scheme: Employers register for free, assuming that they pay staff via PAYE. PAYE is essential, as the scheme relies on a salary sacrifice basis.
2) Pick your package: Select a package that suits your needs. You can do this by visiting the Cyclescheme calculator. Once you have a budget in mind, select a local store or online retailer with whom to shop. As we roll into the scheme's 20th year, there are hundreds of local and national retailers that support the scheme.
3) Get your gear: Your employer reviews your application and pays for your gear. You then receive an eCertificate, which you exchange for your gear in-store or online.
4) Pay over time: Your Cyclescheme benefit will appear in your payslip among other employee benefits, deducted from your salary before tax.
5) Choose an ownership option: When your hire agreement and salary sacrifice ends, you can keep your bike and gear by making a small additional payment. Cyclescheme will contact you regarding ownership options at the end of your hire agreement to help you decide what to do next.
Gary Webb is marketing and communications director for FMP Global