Originally Posted by
rmwesley
The UK government have recently dropped the £1,000 upper limit on the value of a bike / equipment you can purchase under the Cycle to Work scheme. It is now at the employer's discretion to set the upper limit, which means the scheme is suddenly a lot more attractive.
Not for lack of looking, but I haven't found anything which explains what kind of overall saving you could expect on the value of the bike. It looks like you "rent" the bike for 12 months, with the monthly rent equal to bike cost / 12 less income tax, e.g. if you went for a £1,000 bike and pay 40% tax then you would pay £1,000 / 12 * 0.6 = £50 per month, or £600 after 12 months. What happens next though? Do you pay a balloon payment to buy the bike outright? Is it some residual value of the £400 left to pay?
Anyone got any practical experience of the savings they got out of the scheme?
i've used the cycle to work scheme twice now, and saved a bit of money, the monthly payment is deduced from your pre-tax salary and at the end of the 12 Months, you can either pay a 'own it now' or 'own it later' fee, the own it now is about 20% of the certificate value and the own it later is about 5%, which in affect extends your hire period for another 3 years at which point the bike is then yours. I've done the own it later on both of my schemes. My last bike I bought on interest free for 18months.