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Cycle to work scheme

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DrBunker
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Cycle to work scheme

Post by DrBunker »

I'm just about to get this set up at my firm and I wondered if anyone has any experience of the scheme. Specifically I'm a little concerned about the final point here:

https://www.cyclescheme.co.uk/employers ... ee-bike-fo" onclick="window.open(this.href);return false;

My employers have the usual pros and cons but I can see them using this as a stick to beat me with at the end of the 12 months. I wondered if I could get something signed in advance but that might prove difficult.

At the end of the day it's too good an offer to miss out on with a potential saving of up to 45% but I'd be interested in any other opinions.

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Re: Cycle to work scheme

Post by Surprised »

Sounds a bit of a con.
You get a bike with a value of say 500 quid which you pay over a year. At the end of that year you can buy the bike at market value or pay a deposit of 35 quid to hire it again for up to 3 years. Then you give it back. Do you pay the 500 quid hire charge each year?

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Re: Cycle to work scheme

Post by jpk »

I've done the scheme at work, got a £450 bike for 12x20ish pound payments then paid a nominal 1 pound at the end of the year to keep it forever.

It got nicked a few months afterwards

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Re: Cycle to work scheme

Post by Knulpuk »

I believe the nominal £1 has been replaced by a residual value calculation something like >£500 - 25% value, <£500 , 18% value.

the £35 hire charge I assume takes it away from these residual value calculations so you just get it 4 years after you started for the £35.

Does that make sense?

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Re: Cycle to work scheme

Post by Moist von Lipwig »

I got one through cyclescheme a couple of years back, they introduced this change during my first year of payments. Its nothing really other than getting another payment out of you. At the end of the year I paid the fee, forget how much it was, if memory serves it was 2% for bikes under £500 and 5% for bikes over £500 and the 'hire' extends for a further 3 years, at the end of the 3 years the bike is yours. My bike became 'mine' this january.

There was a large company employee discussion about it as to us being done over but as the bloke who set up our scheme put it, 'why would we want a load of second hand bikes we wouldn't have a use for with no actual value'.

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Re: Cycle to work scheme

Post by DrBunker »

So for a £600 bike I'd pay the 12 monthly installments from gross pay and then £150 at the end? I've heard of the smaller percentages when discussing it in bike shops but I can't see this clarified anywhere on the site. :?

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Re: Cycle to work scheme

Post by Moist von Lipwig »

my bike was £700 and I paid a continuation deposit of £45.50

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Re: Cycle to work scheme

Post by unc.si. »

Basically you pay over 12 months via salary sacrifice but have a hire agreement over 3 years to avoid (or minimise) the market value payment, in consideration for a small admin charge.

Exact details vary between schemes.

Bike shops won't give you a good discount on the bike price though (they have to pay 10% to cyclescheme, which is getting on for half their profit on a new bike).

It's OK, but not as good as it used to be. Better off getting a good sale offer on a new bike in many cases, although it's still worth considering cyclescheme.

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Re: Cycle to work scheme

Post by Knulpuk »

DrBunker wrote:So for a £600 bike I'd pay the 12 monthly installments from gross pay and then £150 at the end? I've heard of the smaller percentages when discussing it in bike shops but I can't see this clarified anywhere on the site. :?
you could do or you could just hire it for £35 for another 3 years and then they will give you it at the end - this bit is just a mechanism to swerve the £150 - though you could go down this route if you wanted to.

If the residuals are so poor I would actually be tempted to just go for a second hand bike - though I don't really know what I am talking about.

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Re: Cycle to work scheme

Post by DrBunker »

I've sent them an email to clarify how this works as I'm not at all clear. This paragraph has me spooked:
At the end of this period, if the employee does not wish to keep the bicycle or safety equipment, then Cyclescheme will refund the deposit in full. Alternatively, Cyclescheme may at its discretion, offer ownership of the bicycle or safety equipment to the employee at this point, and no further action or payment will be required if they wish to keep the bicycle or safety equipment.
Initially I thought (based on conversations with various bike shops) that it was a 12 month deal with a small payment at the end but now I'm not so sure... :?

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Re: Cycle to work scheme

Post by Moist von Lipwig »

12 month payments with a largeish payment at the end, or a small payment to extend the hire for another three years until the bike is officially yours at no further cost down the line.

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Re: Cycle to work scheme

Post by DrBunker »

I can't see anything about the larger payment, although it does refer to the smaller payment being the more popular option so that implies there is an alternative. What I'm more concerned about is the bit about it being at their discretion. As you said earlier I'm not sure why they'd want the bike back after that but it still concerns me.

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Re: Cycle to work scheme

Post by unc.si. »

Just a little bit of legalese.

seriously, nothing at all to worry about on that front.

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Re: Cycle to work scheme

Post by DrBunker »

Really I just need to weigh up if it's worth doing on a £600 bike as a HRT. The calculator needs an employer code to work so I assume this is something they issue themselves and the scheme isn't set up yet. I wouldn't want to risk the 4 year option so would need to pay the 25% in 12 months and without doing the calcs myself I can't see that I'd save much more than the £150 including the fees...

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Re: Cycle to work scheme

Post by DrBunker »

According to this the saving would only be about £125 based on the 12 month option. On the basis that the employer is not legally allowed to advise you how much they'll charge you at the end of the scheme so this saving could be totally removed if they decided to mess me around.

Doesn't really seem worth it on this basis given that most bike shops would give some money off if you buy it directly from them rather than via the scheme.

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Re: Cycle to work scheme

Post by Knulpuk »

it is popular with employers though as they swerve some Employers NI and maybe even claim back the VAT.

MvL summed it up better than me.

I think you pay your year, a small admin charge for a lease and that's it - if you leave they can ask for the bike back - but everything is negotiable

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