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 e-bikes and adapted cycles from the scheme, the cap discriminated against older people and those with disabilities,” Edgell said.
Sarah McMonagle, Cycling UK’s director of external affairs, pointed to the return on investment from Cycle to Work: “While capping the scheme may sound like a sensible way for Ministers to save money, in reality, it will cost the government a lot more. For every £1 spent on the Cycle to Work scheme, we see over £4 in returns: boosting productivity, reducing sick days, and saving households money.”
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.
