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So the wife is looking at a new bike, mainly for commuting but the odd leisure ride.
LBS are super helpful and talked about different schemes.
I wonder what the actual costs of salary sacrifice schemes are, e.g. how much does it impact pension contributions or anything else?
LBS owner said it is possible to do both cycle to work (although I think NHS is tied to Halfords?) and Green Commute Initiative.
Any advice or signposting to precious discussions would be appreciated.
I think nhs is generally the cyclescheme one so not only halfords. Even if is halfords, they will supply from others too, in process of looking into it too
https://www.cyclescheme.co.uk/
Just check with your employer cos a lot now contract out things like employee benefits to third party companies and they're much more militant about who supplies the bike.
My previous, and my current, employer had both gone down this route - basically some bunch of absolute pirates phones the HR department and says that for a monthly fee, they'll look after all those pesky employees wanting benefits. And then they send you a load of "offers" like 0.5% off a CentreParcs holiday to be taken anytime outside of school holidays for a family of four only or 1% off your next shop at Boots provided it's over £200 and happens on a Tuesday.
The ones that ran our Cyclescheme refused to deal with anything outside of Halfords, even though a lot of shops have signed up to it.
Thank you.
I just wondered if it saves your employer 13% on their on costs for NI and pension contributions, then that will mean a smaller pot come retirement day. Not sure how to factor this in to the savings.
The Halfords scheme is Cycle2Work but you are not tied to Halfords, you can use Tredz and lots of independents. I’ve taken delivery of a Trek Fuel from Blazing Bikes, got a Dolan gravel bike a couple of years ago, both through Cycle2Work. <br /><br />
i wouldn’t overthink the pension impact, especially for lower value bikes as it so small. Savings on bike though are good, especially so for higher rate tax payers. <br /><br />
Cyclescheme have just ramped up the admin charge they administer to retailers though. If buying through Cyclescheme and using your LBS, it’s worth keeping this in mind. <br /><br />
https://road.cc/content/news/bike-shop-owners-fume-cycle-work-changes-305307
If it's just commuting have you considered second hand? I picked up a second hand pinnacle arkose x for way less than the monthly payments on a new bike - also I was limited to evans c2w. Depends if you can afford the initial payment
I just wondered if it saves your employer 13% on their on costs for NI and pension contributions,
Depends on the employer and the pension scheme, but salary sacrifice means you are giving away salary in return for a benefit.
in the case of a normal defined contribution pension scheme the employer contributions would be reduced because your salary was now lower.
Defined benefit/final salary schemes are different and you are better asking your employer about that.
I wonder what the actual costs of salary sacrifice schemes are, e.g. how much does it impact pension contributions or anything else?
There’s a lot of ‘it depends’ on there. As it’s salary sacrifice, it comes off pay before pensionable income is calculated, which means it does have an impact in the 2015 NHS scheme (which is career average earnings). There’s also a theoretical ‘benefit in kind’ liability though I don’t know if anyone has actually been done for this.
Also AFAIK there’s no ‘NHS’ C2W scheme - ours is through Vivup.
Some employers also enable you to salary sacrifice your pension contributions which means your pension contributions aren't affected by making a salary sacrifice to buy a bike.
Unfortunately I don’t think the Nash is one of those.
The ones that ran our Cyclescheme refused to deal with anything outside of Halfords, even though a lot of shops have signed up to it.
was it cycle2work by any chance? Because they are Halfords. Once you’ve applied for and received your (halfords) cycle2work voucher it can be transferred to another retailer. There’s a list and search tool for who their partner retailers are on the cycle2work website.
was it cycle2work by any chance? Because they are Halfords. Once you’ve applied for and received your (halfords) cycle2work voucher it can be transferred to another retailer. There’s a list and search tool for who their partner retailers are on the cycle2work website.<br /><br />
not entirely accurate description of process. If buying from another retailer you just use the finder to check they take C2W, then get a quote, submit it and wait for your employer to approve. All pretty seamless and nothing needs transferred. I know this as I did it a couple of weeks ago.
Getting a bike via the salary sacrifice has a very tiny impact on pension. Getting a new EV fully expensed for £500 a month is a bit different. A few folk at work doing the EV route - going to impact pension in a big way over 3 years.