Cycle To Work Schemes

jlfrs01

Hi everyone, if this isn't the right place to write what I'm about to post then any Admins feel free to move or delete, etc.

This is about a possible word of warning for employees either in or considering signing up to hire a bicycle under the Government's "Cycle to Work" scheme.

My previous employer joined a scheme and I chose to participate. Six months into the agreement a round of redundancies was announced which included my role. Under the terms of the hire agreement, as I was to leave the company I had to settle the balance of the contract (6 months) in full. This was to be taken from my final salary which I expected but what I didn't realise is that it would be taken from net pay so I would lose the tax advantage.

Blow 2 came from the scheme operator who I had contacted to explain my circumstances. I was told I had 2 options, either to return the bike to them or to buy it and as the bike was under a year old the settlement figure was a staggering 25%. They explained that most employees choose to extend the hire period and when the contract ends they pay a far smaller figure because of the reduction in residual value. 

I was technically still on notice so I approached my company's scheme operator and asked, given the circumstances not of my making, if they would agree to an extension of the contract from 1 year to 4 which would make the settlement figure a far more reasonable 6%. I expected them to refuse and I was right because as a soon to be ex-employee I couldn't be part of their scheme.

Faced with either writing off thousands of Pounds with nothing to show for it or stumping up the 25% I chose the latter option so I could keep the bike, albeit at an overall cost far higher than if I had merely bought it from a shop.

Herzlos

As much as it sucks, that's in the terms and conditions when you signed up for the scheme, so you either need to remain confident in being employed or have some contingency scheme in place.

In your position (and it may be too late here) I'd try to get something figured into your redundancy package to mitigate it - it's your employers fault that you need to settle the balance now and not 6 months further away. Ideally you'd want them to cover the difference between what you would have paid and what you're having to pay, albeit I'm not sure how much legal time you'd want to waste on what may only be a few hundred £ worth of bike.

Admittedly I'm not sure why it'd come off your final salary after tax, or why you were forced to buy the bike then instead of paying off the outstanding balance of the lease to buy the bike at 4 years.

The market for bikes has dipped a bit lately, so you're probably not going to be able to sell it and recoup much of the loss. The accessories will be virtually worthless too.