UK businesses could save employees £100 a month with this simple perk

As employers grapple to support staff during the current cost of living crisis, they could be ignoring a key employee benefit that will bring substantial cost savings for workers.

New research from engagement platform, Sodexo Engage shows that currently only 11% of UK employees have signed up to the government’s Cycle to Work scheme. That’s despite it being one of the most cost-efficient forms of commute.

The research, timed to coincide with National Bike Week (5^th – 12^th June 2023) reveals that, while 64% of UK employees currently have access to a Cycle to Work scheme, only 25% of them have made use of the discount.

In the face of soaring commute costs, and an increase in rail strike action, Sodexo is recommending business owners sign up to the Cycle to Work scheme to promote a cheaper, environmentally-friendly commute method to their employees.

Employees could save £1,199 a year on travel costs

Following a 5.9% increase in train commuting costs earlier this year, Sodexo Engage surveyed 1,000 UK workers to calculate the average cost of travelling into work in 2023.

In collaboration with Censuswide, Sodexo discovered that respondents are spending an average of £24.97 on commuting expenses each week. Over the course of a year, this accounts to a staggering £1,199 per individual.

Notably, for those in London, the figures skyrocket to £1,577, making it the most expensive commute in the UK.

Commute costs have become a major concern for today’s employees – particularly for younger workers, who tend to be less financially secure.

In a recent Startups survey, exploring attitudes towards a four-day week, we discovered that 38% of employees would choose to work one less day a week to reduce their commuting expenses and time.

Graham James, Director at Sodexo Engage, comments: “Clearly just having a Cycle to Work scheme doesn’t guarantee take up, as our research shows.

“It’s important that employers are communicating these benefits and making it as easy as possible for employees to make use of them in order to gain those all-important savings.”

Scheme has savings for employees and employers

For the business owner, investing in an attractive benefits and perks package for employees brings multiple organisational advantages. Crucially, it can go a long way to improving staff morale and lowering turnover rate.

In today’s scarce talent market, companies need to be pulling out all the stops to attract and retain their existing workforce.

As a result of the cost of living crisis, many workers are feeling demotivated following a fall in real wages. The Cycle to Work scheme is an example of a benefits package that is designed to support financial wellbeing and education. Its introduction could help employees to budget and stretch their wages further without the need for a pay rise.

Organisations that already offer a Cycle to Work scheme, but suffer from few sign-ups, should also reexamine their approach to the policy to see how they might encourage greater employee engagement.

Some of the challenges will be simple to fix; for example, educational barriers. When asked why they didn’t want to cycle to work, 14% of respondents said their workplace didn’t have the facilities to allow them to shower when they arrived.

James adds: “The reasons given as to why people aren’t cycling to work shows a clear need to empower employees to help them realise that cycling to work is a viable option to offset the cost of commuting.

“This will require a holistic approach from HR and business leaders, encouraging employees to take up cycling and make full use of the Cycle to Work benefit.”

How does the Cycle to Work scheme work?

With a Cycle to Work scheme, the employer will purchase a bike, and accessories, for the staff member to ride to work. The individual can then ‘hire’ the bike through salary sacrifice, spreading the cost over a repayment period of 12-18 months.

However, the employee won’t be paying full price for the bike. Employees can save up to 42% in tax and NI contributions. That means the price tag of a brand new bike, which typically averages around £600, would be slashed to just £348.

The business will also receive a discount. For every staff member who goes through the scheme, the employer can avoid paying around 13.80% in National Insurance Contributions (NICs). On average, bosses will save £138 for every £1,000 spent.

In addition to these benefits, cycling to work can boost an employee’s mental and physical wellbeing, as well as being a much greener option than other modes of transport.