Cycling Minister Michael Ellis announced earlier this week that the scheme guidance would be “refreshed” to help more commuters understand how they can cycle to work by pedelec, as part of a drive to increase active travel.
In the years since the Cycle to Work initiative was launched 20 years ago, more commuters are choosing electric bikes as a convenient way to get to and from work – 70,000 electric bikes were sold in the UK last year according to the DfT. The scheme’s £1,000 purchase price limit has been seen as restricting the choice for those wanting to use a higher value pedelec however.
The DfT has confirmed to Pedelecs that while the £1k purchase cap remains unchanged for employers running a Cycle to Work scheme (that don’t have FCA authorisation), they can offer the benefit of an increased purchase cap to their employees if they use the services of an FCA – Financial Conduct Authority – authorised scheme, which isn’t tied to the £1k ceiling.
A DfT statement says the updated guidance will “make it easier for employers to provide bicycles and equipment including e-bikes worth over £1,000, by making it clear that FCA authorised third party providers are able to run the scheme on their behalf. ”
The DfT this week told Pedelecs: “The implementation guidance is being refreshed, to clarify the process for employers who want to hire cycles and equipment under a salary sacrifice scheme. The £1,000 purchase cap remains unchanged. The employer will need to seek authorisation from the Financial Conduct Authority (FCA) to hire any cycle package worth over £1,000 to their employees.” They add that the refreshed guidance “clarifies that employers can enter into agreement with a third party scheme provider with FCA authorisation to run the cycle to work scheme on their behalf. This benefits employers and employees as it allows them to access cycles and equipment worth over £1,000.”
As well as boosting individual health, the DfT says more people on e-bikes will help tackle congestion, speed up journey times and reduce the cost of daily commutes. A survey of 2000 commuters commissioned by Evans Cycles estimated that commuters could save an average of £7,791 over 5 years by switching to electric bike from car, bus, tube or train.
Describing electric bikes as a ‘game changer’ for making cycling easier for all, Michael Ellis said: “Cycling is a vital and easy way to improve air quality, reduce pollution and create vibrant towns and cities. Making sure that bikes are easily available is crucial to helping more people make the switch to greener modes of transport. Ensuring people of all abilities and fitness levels can cycle together is a key part of this.”
The Cycle to Work salary sacrifice scheme was introduced in 1999. Employers purchase a bike for staff wanting to commute as a tax-free benefit; staff members pay ‘hire charges’ through salary sacrifice and may buy the bike for a percentage of its original value after the ‘hire’ period. There have been calls for the initial £1000 purchase cap to be raised to increase the options for purchases of electric bikes for some time.
Image credit: Wisper