It’s been over 25 years since the UK Cycle to Work scheme was introduced, enabling employees to use salary sacrifice to purchase bicycles and latterly ebikes, as well as cycling equipment for their commute.
Now the Cycle to Work Alliance, a consortium that includes Halfords, Evans Cycles, Perkbox, Cycle Solutions and Cyclescheme, has commissioned independent research to quantify the benefits of the scheme.
The total annual financial benefit is assessed at £573m, in addition to the reductions in congestion and transport emissions it enables, which were not quantified.
The numbers break down into cost savings for commuters, increased workforce productivity, retail income from new bike purchases and the accompanying tax revenue.
Commenting on the research, local transport minister Lilian Greenwood said: “The Cycle to Work Scheme has been a real success story, helping millions of people choose a healthier, greener way to travel while boosting local economies and supporting jobs.”
Commuting cost savings
The research evaluated the saving to employees who switched from commuting by car to using a bike at £1,262. Separately, the Cycle to Work Alliance says it’s found around 80% of participants claim to cycle every week, up from 40% before joining the scheme.
Productivity increases
There’s an estimated economic benefit of £37m across the UK economy. This comes from reduced absence through sickness, evaluated at £63 per person per year, and improved attendance, estimated at £115 per person per year.
Retail income
Bikes, accessories and cycle clothing worth £219m were purchased via the Cycle to Work Scheme in 2023/24, which is credited with helping the cycling retail sector during its post-Covid downturn.
HM Treasury also benefits, with £43.8m of VAT collected on those purchases.
200,000 participants per year
In 2023/24, the Cycle to Work Alliance says 199,000 employees made use of the scheme, a number that rose by 10,000 in 2024/25. Over the period since its launch, it says the scheme has been used by more than 2 million riders. It points out that of those, 38% are new cycle commuters.
While for many years limited to a £1,000 total spend, the Cycle to Work Scheme is now available for larger purchases, putting performance bikes and electric commuter bikes within scope. The Cycle to Work Alliance is campaigning to increase eligibility to self-employed and lower-paid workers to widen its benefit.
