Despite rumours of a cap on the Cycle to Work scheme, Chancellor Rachel Reeves' 2025 budget left the salary sacrifice bike purchasing programme's rules unchanged.
The Financial Times reported in early November that the previous £1,000 cap could be restored in Reeves’ budget. Yet, the Autumn budget, which promised “no austerity or reckless borrowing”, did not mention the salary sacrifice programme.
The previous £1,000 cap stood from the scheme’s inception in 1999 to 2019. But inflation in bicycle prices during the Covid pandemic, and the inclusion of electric bicycles in the scheme, meant many bikes and ebikes were beyond the cap.
- Read more: 1.6 million people have saved up to 47% on a new bike with Cycle to Work – here's how to join them
Rumours of a cap prompted a backlash from the cycling industry. The Cycle to Work Alliance chair, Steve Edgell, pointed to the increased range of bikes available through the scheme since 2019.
“In 2019 a spending cap of £1,000 was abolished, as it was preventing people from being able to access the equipment they needed for everyday commutes. By effectively excluding ebikes and adapted cycles from the scheme, the cap discriminated against older people and those with disabilities,” Edgell said last week.
In response to today's budget, Edgell said the Cycle to Work Alliance was “happy” no changes had been made to the scheme and highlighted how Reeves recognised that one of the greatest pressures on household budgets is the cost of commuting.
“We will continue to work closely with government to ensure the scheme remains one of the most popular and successful workplace initiatives – helping save commuters costs by over £1,200 every year.
“This follows endorsement of the Scheme by Transport Minister Lilian Greenwood this Autumn, who called the scheme ‘a real success story, helping millions of people choose a healthier, greener way to travel while boosting local economies and supporting jobs’,” Edgell said.
Sarah McMonagle, director of external affairs at the charity Cycling UK, said the picture for walking and cycling investment in today’s budget is “still unclear” but added that it’s “reassuring to hear the chancellor call infrastructure the backbone of economic growth”.
“If the government is serious about boosting the UK economy, we need greater investment in walking and cycling, putting more power in the hands of local leaders to unlock regional growth and giving us all more freedom to travel.
“For every £1 spent on cycling and walking schemes in the UK, nearly £6 back in benefits. From better public health to more people shopping on the high-street, investment in cycling and walking carries huge potential to revitalise communities across the country,” McMonagle said.
Earlier this year, the Cycle To Work Alliance – a consortium including Halfords, Evans Cycles, Cycle Solutions, and Cycle Scheme – commissioned independent research to quantify the benefits of the scheme.
It found that the total financial benefit of the scheme is £573m. The numbers break down into cost savings to commuters, increased workforce productivity, retail income from new bike purchases and tax revenue.
The Cycle to Work Alliance says 199,000 employees made use of the scheme in 2023/24, and this number rose by 10,000 in 2024//25. Since the scheme launched in 1999, the Cycle to Work Alliance says it has been used by more than 2 million people.
