13 February 2015

Cycle to work: Save money and keep fit

With the Tour de Yorkshire kicking off in May 2015, we take a look at the benefits of pedal power and the Government’s Cycle to Work scheme. Here’s an overview of the initiative, showing how much it could save you, and we compare the cost of cycling with running a car.

How does it work?

If your employer is signed up to the Cycle to Work scheme you could get a new bike at a discount price because of the tax benefits. These tax breaks are available on the understanding that your employer is hiring the equipment out to you for cycling to work.

You can choose a bike and accessories up to the value of £1,000, and once your application has been approved by your employer you’ll pay for the equipment in monthly instalments through salary sacrifice – giving up part of your salary in exchange for a non-cash benefit.

You'll pay less Tax and National Insurance on the 'benefit' so this can work out a lot cheaper than purchasing a new bike outright. There’s a lot of support for the scheme, with operators including major chains and reputable bike shops up and down the country. Each provider is slightly different, but in most cases your employer will own the bike and hire it out to you for an agreed period. Although you don’t technically own the bike, you can use it outside of work if you also ride it to work regularly. At the end of the hire period, you may also be given the option to take over ownership of the bike.

Why cycle?

We all know that travelling in the rush hour isn’t much fun, but with two wheels you could beat the traffic and not have to worry about parking once you reach your destination. Cycling can have a positive effect on your physical and mental well being, too. Regular exercise is proven to boost fitness levels and reduce stress, which could help you feel more energetic and focused at work. You’re also doing your bit for the environment by reducing your carbon footprint, as cycling cuts congestion and pollution.

What can I save?

By cycling to work, you could save on transport costs like bus, tube, tram or train fares, parking and petrol or diesel costs. Higher rate taxpayers could also save up to 42% on the cost of a new bike, while basic rate taxpayers can make savings of up to 32%. 

The content displayed on our recent news and articles page is for information purposes only, and is accurate at the time of publication. The information will not be maintained, and so we cannot guarantee that at any given time the information will be up to date or complete. Please verify any information you take before relying on it.

Nationwide is not responsible for the content or availability of external websites. Nationwide does not make any recommendation or endorse any advertising, products, services or other content on such external websites. Views expressed on third party websites are those of the public and unless specifically stated, are not those of Nationwide.

Most popular

Your Black Friday survival guide

11.11.16

Black Friday tips and tricks to take the stress out of your Christmas shopping so that you can concentrate on finding the perfect presents.

You may also be interested in...

Our helpful guides

We've created a range of helpful guides to help you make better financial decisions regardless of your circumstances. Find out more about owning property, growing wealth and planning for life events.

Our products

Whether you are after a current account, a savings account or even looking for a mortgage, Nationwide has a range of great products that could help you, no matter the situation.