Cycle to Work Savings

How Does the Cycle to Work Scheme Save Money?

The Cycle to Work scheme is a government-backed initiative that allows you to obtain a new bike and safety equipment tax-free. You pay for the bike through Salary Sacrifice.

What is Salary Sacrifice?

Instead of paying for the bike from your net (take-home) pay, the cost is deducted from your gross salary before tax and National Insurance (NI) are calculated.

Because your gross salary is lower, you pay less Income Tax and less National Insurance. This "avoided tax" is where your savings come from.

Firefighter Specific Considerations

Pension Impact: It is important to check if your brigade treats salary sacrifice as reducing your "pensionable pay". In the Firefighters' Pension Scheme (2015), benefits are based on your career average earnings. Temporarily reducing your salary *could* slightly reduce the pension you accrue for that specific year, though many schemes use "notional pay" (your salary before sacrifice) to protect pension rights. Always check with your HR department.

Ownership Fee

Strictly speaking, you are "hiring" the bike from your employer during the payment period (usually 12 months). At the end of the term, to keep the bike, you may need to pay a small ownership fee (often based on HMRC's Fair Market Value table) or extend the hire period for free until the value depreciates to zero (the most common option).