07801 250 668secretary@uckfieldchamber.co.uk

What’s it all about? Chamber member, The Electric Bike shop explain…

The Cycle to Work benefit generates tremendous value to employees, especially in the current cost of living crisis. It’s a phenomenal tool that allows them to save literally thousands of pounds on a bike and pay for it monthly via salary sacrifice.

What employees get out of the scheme is clear: a new bike and kit at a reduced price, no upfront payment, no interest, and the cost spread over 12 or more months. They also save money long term on travel costs. But what’s in it for you?

Firstly, it won’t cost you anything. The scheme is free to join and while you do have to cover initial payments for employees’ bikes, you claim that back in full via their salary sacrifice.

In fact it will save you money. Employers can save up to 13.8% on National Insurance contributions for every employee who uses the scheme – an average saving of £138 on every £1,000 you process via the programme.

You’ll also benefit from a happier, healthier and more productive workforce. Active travel, such as cycling or walking to work, improves physical fitness as well as wellbeing. It also reduces absenteeism – on average people who cycle to work regularly take 1.3 fewer sick days per year than those who don’t.

It also helps to reduce your company’s environmental impact, as well as that of your staff members. This is something that it is of increasing importance among potential employees, especially younger ones. It helps in fulfilling your corporate social responsibility, as employees reduce their carbon footprint.

However, too many company schemes have structural flaws that limit take up. One of the biggest flaws is voucher limits that are too low.

Voucher amounts are often set by HR teams who (spoiler alert) often aren’t cyclists. So they may set a voucher limit at £2000, thinking that’s a generous amount. But it’s not, and voucher limits have not kept track with inflation/ bike prices, and a good e-bike can cost between £3000-£5000. Your voucher limit should accommodate this.

What happens when you set too low a limit? Three things:
(1) You force employees into sub-par ownership. If your limit is too low, your employees are forced to buy cheaper bikes that don’t perform as well. Or, their batteries may catch fire!
Furthermore cheaper e-bikes may not last as long, especially in regards to battery life. That’s not really consistent with employers wanting to encourage cycling as part of ESG sustainability commitments

(2) You dramatically reduce the economic benefits of Cycle to Work. Occasionally, (and to be clear we don’t condone this) an employee will apply for a voucher and then top up with their own cash. Say they get a £2000 voucher, then use £2000 of their own cash to buy a £4000 bike. Their tax saving has gone from 40% to 20%, and they have had to fund the initial £2000 on Day 1. So, half the savings and a much bigger cash flow hit.

(3) Employees simply don’t use your scheme, and you are incurring the cost of administering a scheme that isn’t fit for purpose. I know so many people who are cyclists and have worked for years at the same company and never used a cycle to work scheme. That’s the scheme failing employees…. It’s not a benefit if no one uses it.

So, our advice is to raise your voucher amount so that employees can truly maximise the benefits of cycle to work, and you will have a scheme that they truly love.

At the Electric bike Shop we take most vouchers but encourage new business to look at gogeta as a much better option for employers and employees.

For more information on how your employees can save and how you as an employer can save money visit gogeta.

And for your next bike take a look at what we offer at The Electric Bike Shop.

Or come and meet the team:

Address:      2, The Seed House, Bell Walk, Bellbrook Industrial Estate, Uckfield TN22 5DQ – Phone:         01825 764695