UK to cap cycle-to-work scheme at €1,000 to curb luxury bike purchases
The government is set to introduce a cap on the value of bicycles that can be acquired through the salary sacrifice scheme, known as the cycle to work scheme. According to the Financial Times, the maximum amount will be 1,000 euros. This move comes as the scheme's cost to the Exchequer has increased significantly in recent years, and high earners have been purchasing luxury bicycles worth more than £10,000.
Chancellor Rachel Reeves is planning to impose this cap to prevent high earners from exploiting the scheme. The cap is expected to be announced in the upcoming Budget. The scheme, which allows employees to buy bikes and accessories via an interest-free loan from their employer, has seen its cost to the Exchequer rise from £55 million in 2019-20 to £130 million in 2024-25.
Retailers have warned that a strict cap could hinder progress on sustainable travel. They argue that customers are more likely to use bikes consistently if they are reliable and efficient, often at a higher price tag. Environmental campaigners also voice concern, noting that e-bikes, typically more expensive than standard bikes, are effective tools for shifting commuters away from cars.
The government's cap on bicycle purchases through the cycle to work scheme is expected to be 1,000 euros. This move aims to prevent high earners from buying luxury bicycles using taxpayer money. The scheme's cost to the Exchequer has increased significantly, prompting ministers to address the trend of high-value bike purchases. Retailers and environmental campaigners have expressed concerns about the potential impact on sustainable travel.
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